/raid1/www/Hosts/bankrupt/TCREUR_Public/021107.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, November 7, 2002, Vol. 3, No. 221
Headlines
F I N L A N D
SONERA CORP: Ministry Says CEO Election Falls Outside Agreement
F R A N C E
ALCATEL: OmniPCX Leads in IP-Based Communication Applications
SCOR GROUP: Appoints Denis Kessler Chairman and Chief Executive
SCOR GROUP: 96% of Directors Approve Rights Issue
VIVENDI UNIVERSAL: Cegetel in Merger Talks With Belgacom
G E R M A N Y
BAYERISCHE LANDESBANK: Moody's Lowers FSR to D+ on Asset Concern
DEUTSCHE TELEKOM: Plans Ukrainian Operator Minority Stake Sale
HVB GROUP: Sells Brazilian Affiliate To Focus on Core Business
I R E L A N D
ELAN CORPORATION: Concludes Venture With Isis Pharmaceuticals
I T A L Y
CAPITALIA SPA: Moody's Downgrades Financial Strength Rating
TELECOM ITALIA: To Push Ahead Next-Generation Mobile Services
P O L A N D
ELEKTRIM SA: Announces Settlement with EMERITA B.V.
NETIA HOLDINGS: Reports 2002 Third Quarter Results
S W I T Z E R L A N D
ABB LTD.: S&P Lowers Long-Term Corp Credit Rating to `BBB-`
ABB: Wallenberg Increases Holdings To 6.8%, Shares Gain
ABB: EU Clears Sale of Structured Finance Business to GE
CREDIT SUISSE: Fitch Affirms B+ Class E & CCC Class F-2 Ratings
SWISS LIFE: May See Its Board Members Reshuffled
U N I T E D K I N G D O M
AMEY PLC: GBP11.4M Working Capital Guarantees Appear "Illegal"
BRITISH ENERGY: Innogy Denies Specific Deal of BE's Bail-out
COOKSON GROUP: Issues Third Quarter Trading Update
COLT TELECOM: Meeting Highberry Over Petition for Administrator
MARCONI PLC: Completes Supply of DWDM Systems To Vodafone
MYTRAVEL: HG Capital To Lead Bid for Several Divisions
PEARL ASSURANCE: Moody's Lowers Long-Term Fund Rating
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F I N L A N D
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SONERA CORP: Ministry Says CEO Election Falls Outside Agreement
---------------------------------------------------------------
Sonera Corporation (HEX: SRA; Nasdaq: SNRA) announced that The
Finnish Ministry of Transport and Communications has on Monday
issued the following press release in respect of the decisions of
Telia's extraordinary shareholders' meeting:
"The decision adopted by Telia's extraordinary shareholders'
meeting on yesterday evening to elect the Chief Executive Officer
of Telia as a member of the board of directors of TeliaSonera is
not in accordance with the shareholders' agreement entered into
by the Republic of Finland and the Kingdom of Sweden in respect
of the merger of Sonera and Telia. The agreement contains, inter
alia, an agreement concerning the balance within the board of
directors of the combined company and an agreement to the effect
that executives of the company shall not serve as members of the
board of directors. These conditions have not been fulfilled by
the decision adopted by Telia's extraordinary shareholders'
meeting yesterday.
"Efforts are being made to resolve this matter between the
parties. The Finnish Ministry of Transport and Communications has
this morning sent a letter to the Swedish Ministry of Industry,
Employment and Communications in respect of this matter."
Telia's EGM release:
At Monday's extraordinary general meeting in Telia it was
resolved to authorize the board of directors to resolve the
issues of shares and debentures with attached warrants to
subscribe for new shares, necessary for the completion of the
exchange offer directed to Sonera's shareholders and warrant
holders.
The shareholders' meeting also resolved that Telia shall change
its company name to TeliaSonera AB. Furthermore, it was resolved
to appoint Tapio Hintikka, Lars-Eric Petersson, Carl Bennet,
Ingvar Carlsson, Eva Liljeblom, Caroline Sundewall, Roger
Talermo, Tom von Weymarn, and Anders Igel as ordinary board
members and that the company's nomination committee is to be
composed of the chairman of the board and the deputy chairman of
the board. These resolutions shall apply subject to, and as from
the time when Telia has taken possession of shares in Sonera
acquired as a result of the offer. During the shareholder's
meeting the Swedish state, which holds 70,6 % of the shares in
Telia, requested the nomination committee to, among other things,
nominate a non-executive independent director to replace Anders
Igel at the forthcoming annual shareholders meeting.
Finally it was resolved to reduce Telia's share premium reserve
by an amount corresponding to the amount being received by Telia
as share capital and share premium reserve through the non-cash
issue in connection with the offer. Also this resolution is
conditional upon the completion of the merger with Sonera.
The combination of Sonera and Telia will be implemented through
an exchange offer being made by Telia to all shareholders of
Sonera. The contents of this document are neither an offer to
purchase nor a solicitation of an offer to sell shares of Telia.
Any offer in the United States will only be made through a
prospectus which is part of a registration statement on Form F-4
which Telia filed with the U.S. Securities and Exchange
Commission on October 1, 2002. 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, the
prospectus included therein and other documents relating to the
offer that Telia has filed or will file 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 was
filed by Sonera with the SEC on October 1, 2002 regarding the
offer. You may obtain a free copy of these documents at the SEC's
web site at www.sec.gov. You may also inspect and copy the
registration statement on Form F-4, as well as any documents
incorporated by reference therein, 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-123 86 Farsta, Sweden. Attention:
External Communications or Investor Relations (tel: +46 8
7137143, or Sonera Corporation, 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.
Sonera Corporation (HEX: SRA, NASDAQ: SNRA) is a leading provider
of mobile and advanced telecommunications services. Sonera is
growing as an operator, as well as a provider of transaction and
content services in Finland and in selected international
markets. The company also offers advanced data solutions to
businesses, and fixed network voice services in Finland and
neighbouring markets. In 2001, Sonera's revenues totaled EUR 2.2
billion, and profit before extraordinary items and taxes was EUR
0.45 billion. Sonera employs about 7,400 people. www.sonera.com
CONTACT: Mr Jari Jaakkola, EVP, Corporate Communications & IR
Phone: +358 2040 65170
E-mail: jari.jaakkola@sonera.com
In the United States
Mr. Steve Fleischer, VP, Investor Relations
Phone: +1 973 448 4616
E-mail: steve.fleischer@sonera.com
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F R A N C E
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ALCATEL: OmniPCX Leads in IP-Based Communication Applications
-------------------------------------------------------------
Alcatel (Paris: CGEP.PA and NYSE: ALA) announced that according
to Gartner's report,"2002 EMEA Corporate Enterprise Telephony
Magic Quadrant*" by Research Director, Steve Blood, the Alcatel
OmniPCX 4400 is positioned in the leader quadrant for the
European, Middle East and African markets (EMEA).
Gartner evaluated each vendor on a number of criteria including
corporate strategy, technical innovation, market message,
services strategy, mind share, market share, product
capabilities, financial capabilities and channel distribution.
Indeed, Alcatel is fully committed to the enterprise market for
years by investing 14% of its total revenue in Research &
Development, allowing Alcatel to be a leader in enterprise
communication solutions with 22.3 % market share in Western
Europe Alcatel figures (September 2002).
The Alcatel OmniPCX 4400 's design is based upon a unique dual
IP/TDM capability in order to protect customer investment by a
smooth evolution towards IP communication while maintaining
advanced communication features. A full selection implementation
of legacy and IP Telephony standards makes it easy to integrate
with existing e-business applications for an efficient total cost
of ownership.
The Alcatel OmniPCX 4400 network capacities allow remote and
branch office workers the same access to information and
applications. At the same time, cost optimization can be done
through 'least costs routing' mechanisms.
Furthermore, Alcatel OmniPCX 4400 provides applications and
services that bring better workplace productivity, flexibility
and comfort to an increasingly mobile workplace while fitting
standard-based security policy of corporations.
In addition, Alcatel has completed the final phase of its move to
a pure indirect channel model, which allows to fully optimize its
channel mix to fast evolving market requirements.
Jean Luc Fourniou, general manager of e-Business Networking
Activities at Alcatel said: "Alcatel solutions significantly
reduces the risk of execution when moving to IP Communication,
due to its sheer dual IP-TDM capability. This is a major
importance when a large corporation chooses to rationalize on a
single platform, but at the same time is confronted with
different level of readiness of data networks in each site. This
is why Gartner 's report confirms Alcatel offer is one of the
most suitable for a long term investment."
* The Magic Quadrant is copyrighted by Gartner, Inc. and is
reused with permission. Gartner's permission to print or
reference its Magic Quadrant should not be deemed to be an
endorsement of any company or product depicted in the quadrant.
The Magic Quadrant is Gartner's opinion and is an analytical
representation of a marketplace at and for a specific time
period. It measures vendors against Gartner-defined criteria for
a marketplace. The positioning of vendors within a Magic Quadrant
is based on the complex interplay of many factors. Gartner does
not advise enterprises to select only those firms in the Leaders
segment. In some situations, firms in the Visionary, Challenger,
or Niche Player segments may be the right match for an
enterprise's requirements. Well-informed vendor selection
decisions should rely on more than a Magic Quadrant. Gartner
research is intended to be one of many information sources
including other published information and direct analyst
interaction. Gartner expressly disclaims all warranties, express
or implied of fitness of this research for a particular purpose.
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.
SCOR GROUP: Appoints Denis Kessler Chairman and Chief Executive
---------------------------------------------------------------
The Board of Directors of SCOR Group met on November 4, 2002 and
unanimously nominated Denis Kessler Chairman and Chief Executive
of SCOR Group, to replace Jacques Blondeau who will leave his
position after eight years as Chairman and CEO of the Group. The
appointment of Denis Kessler will take effect as of November 5.
The Board also renewed its support for Serge Osouf in his
position as President and Chief Operating Officer.
Denis Kessler has decided to leave his positions as Chairman of
the Federation Francaise des Societes d'Assurance (FFSA) and
Vice-Chairman of the MEDEF (French Business Confederation) in
order to devote himself entirely to SCOR Group which he knows
well and has been close to for many years.
In particular he commented, "In the forthcoming weeks, my
priorities are to restore confidence in the Group and to return
us rapidly to profitability. In the immediate future I therefore
intend to concentrate on the planned rights issue while also
being actively involved in the end of year renewal season. I am
confident in the future of SCOR, in the quality of its staff and
in the support of its clients."
Biography
Denis Kessler was born on March 25, 1952 in Mulhouse. He studied
at the Ecole des Hautes Etudes Commerciales, is an "agrege"
(qualified professor) in social sciences, an "agrege" in
economics, has a PhD in economics, a D.E.A. (post-Master's) in
philosophy and a Master's in political science.
From 1990 - 1997 and from 1998 to date he has held the post of
Chairman of the Federation Francaise des Societes d'Assurances
(FFSA). Since 1994 he has been one of the Vice-Chairman of the
MEDEF, (French Business Confederation) with his last position,
from 1998 - 2002, as First Vice-Chairman.
Denis Kessler is a member of the Economic and Social Council, a
member of the National Insurance Council, a member of the
European Insurance Committee and a member of the National
Accounting Commission.
He sits on the Boards of the following companies: Amvescap Ltd;
BNP-Paribas; Bollore; Cetelem; Cogedim; Dexia and Vendome Rome.
Previously he has held the posts of Managing Director and member
of the Executive Committee of AXA (1997 - 1998); Supervisor at
the Ecole des hautes etudes en sciences sociales (EHESS);
Lecturer at the University of Nancy; Board member of Union des
Assurances de Paris and Board member of Union de Banques a Paris.
CONTACT: SCOR
Clare Brennen
Phone: 33 (0)1 46 98 74 71
Delphine Deleval
Phone: 33 (0)1 46 98 71 64
Valentine Semet
Phone: 33 (0)1 46 98 72 32
or
Brunswick
Andrew Dewar
Phone: 33 (0)1 53 96 83 83
SCOR GROUP: 96% of Directors Approve Rights Issue
--------------------------------------------------
The Extraordinary General Meeting of SCOR Group, which took place
Tuesday, chaired by Denis Kessler, approved all the proposed
resolutions, namely:
- authorization given to the Board of Directors to proceed with a
rights issue (approved by 96.01%);
- authorization given to the Board of Directors to proceed with
an increase in the share capital reserved for employees of SCOR
(approved by 93.72%).
The Board which will meet on November 15, 2002, will approve the
accounts for the third quarter of the current underwriting year,
will define the terms and conditions of the rights issue and will
also endorse the Group's recovery plan.
SCOR's third quarter results will be published on November 18
2002.
After this date, and once the COB has issued its visa, the Group
will present all the practical details of the rights issue.
This is not an offer of securities for sale in the United States.
The securities referred to in this document have not been and may
not be registered in the United States. Securities may not be
offered or sold in the United States unless they are registered
or exempt from registration.
VIVENDI UNIVERSAL: Cegetel in Merger Talks With Belgacom
--------------------------------------------------------
Telecommunications company Cegetel, whose control is being
contested by media and entertainment group Vivendi and UK mobile
company Vodafone, is in preliminary merger talks with state-
controlled Belgian telecoms Belgacom.
Reuters gathered from a source that indeed talks are going on
between the two companies.
Vivendi has launched a special purpose vehicle to bid for Cegetel
that would allow it to keep the additional debt off its balance
sheet as it continues to look for ways to lower its existing
EUR19 billion of debt.
Vivendi has recently been reported to submit a letter to the
company's bank lenders outlining how it plans to fund its
acquisition of the French telecommunications company, which
controls France's important mobile operator SFR.
According to the report, Belgian business daily De Financieel
Economische Tijd quoted a government source as saying the
question of Belgacom providing Vivendi with financing was not on
the negotiating table.
Belgacom has previous plans of expanding its outside market
either through acquisitions or partnerships. It is one of the few
European telecommunications operators to be largely debt free and
has hundreds of millions of euros in cash reserves.
The Belgian government owns 50% plus one share of Belgacom. The
remaining 49.9% of the company is owned by a consortium of mostly
foreign telecommunications operators led by SBC Communications of
the United States and TDC of Denmark.
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G E R M A N Y
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BAYERISCHE LANDESBANK: Moody's Lowers FSR to D+ on Asset Concern
----------------------------------------------------------------
Moody's downgraded to D+ from C the Financial Strength Rating of
Bayerische Landesbank (Balaba), while maintaining the bank's
Aaa/P-1 debt and deposit ratings with a stable outlook.
According to the rating agency, "the downgrade takes into account
the further deterioration of Balaba's asset quality."
Moody's noted that the bank has "higher risk appetite" compared
with other German banks currently weathering a difficult economic
environment. The agency predicted that the Munich-based bank's
loan loss provisions in 2002 would be similarly difficult as in
the previous year.
The rating agency believes an improvement in the business
environment is not to be expected in the short term, but it
assigned a stable outlook to the rating to reflect the
expectation that the country's second largest Landesbank will
continue implementing its restructuring program.
The rating agency maintained the bank's Aaa/P-1 debt and deposit
ratings with a stable outlook.
DEUTSCHE TELEKOM: Plans Ukrainian Operator Minority Stake Sale
--------------------------------------------------------------
Leading Eastern European mobile carrier MTS to acquire 16.3
percent stake from Deutsche Telekom for US Dollar 55 million
Deutsche Telekom has signed contracts on Tuesday in Kiev,
finalizing the sale of its 16.3% interest in mobile operator
Ukrainian Mobile Communications UMC to OJSC Mobile Telesystems
MTS, the leading mobile carrier in Eastern Europe. The sale is
subject to several conditions, such as the approval of both the
MTS shareholders' meeting and the respective authorities in
Ukraine. The proceeds in the amount of USD 55 million are part of
Deutsche Telekom's debt reduction program.
With over 1.5 million customers at end of the third quarter 2002,
UMC is one of the leading mobile carriers in Ukraine and operates
networks also in the GSM 900 and GSM 1800 standards. Deutsche
Telekom has held a stake in UMC since 1992.
Likewise, KPN, the Dutch carrier, is to sell its 16.3 % stake in
UMC. Ukrainian carrier Ukrtelecom is to sell 25 % of its stake to
MTS. In addition, MTS agreed with Ukretelecom and Danish TDC on
options to acquire the remaining 42.3 %.
MTS, with more than 5.5 million subscribers, is the largest
mobile carrier in Eastern Europe. Deutsche Telekom holds a 40.1
stake in MTS through T-Mobile International AG. With MTS,
Deutsche Telekom will maintain its commitment to the Ukrainian
telecommunications market.
HVB GROUP: Sells Brazilian Affiliate To Focus on Core Business
--------------------------------------------------------------
As part of its effort to focus on its core activities the HVB
Group sold its participating interest in the Brazilian Banco BBA-
Creditanstalt Group (BBA-CA). HVB's 47.79 percent stake has been
acquired by Itau Bank Ltd., a subsidiary of Banco Itau S.A. of
Sao Paolo, Brazil's second-largest bank.
The transaction is still subject to approval by Brazilian
authorities.
Among Brazil's private banks BBA-CA Group ranks eleventh, with
total assets of US$ 5.3 billion and a workforce of 1200. Its main
field of operations is the financing of large accounts. The
financial institution was formed in 1988 as a joint venture
between Austria's Creditanstalt and several Brazilian
businessmen. In the year 2000 it was transferred by Bank Austria
Creditanstalt to the HVB Group.
The HVB Group will continue to serve its clients in Brazil
through its representative office in Sao Paolo.
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ELAN CORPORATION: Concludes Venture With Isis Pharmaceuticals
-------------------------------------------------------------
Isis Pharmaceuticals, Inc. (Nasdaq: ISIS) announced that it has
regained rights to ISIS 14803, in connection with the termination
of its collaboration with Elan Corporation, plc. (NYSE: ELN)
related to the HepaSense(TM) Ltd. joint venture. Additionally,
Isis and Elan have agreed to amend the terms and extend their
collaboration in the Orasense(TM) Ltd., joint venture through the
end of 2002.
"We are pleased to have negotiated favorable outcomes to both of
the joint ventures with Elan. Our partnerships with Elan have
been highly productive, as we have leveraged the technology
contributions and resources from both companies," said B. Lynne
Parshall, Isis' Executive Vice President and CFO. "We are
enthusiastic about the potential of ISIS 14803 for patients with
hepatitis C virus, and very happy to regain complete ownership of
this drug. We will continue to aggressively pursue the clinical
development of ISIS 14803. Our agreement to continue the Orasense
joint venture is a validation of our exciting work to develop
oral formulations of antisense drugs, with ISIS 104838 leading
the way."
HepaSense
HepaSense is focused on the clinical development of the antisense
drug ISIS 14803 for patients with Hepatitis C. The conclusion of
Elan's participation in the collaboration results from Elan's
continuing restructuring efforts. As part of the termination, all
rights to ISIS 14803 have been returned to Isis, with a potential
royalty due to HepaSense.
ISIS 14803 is an antisense inhibitor of the hepatitis C virus
(HVC). Earlier this week, data presented from two Phase II
studies demonstrated that ISIS 14803 is active in drug resistant,
genotype 1 HCV patients, the most difficult-to-treat patient
population. In the first trial, in which patients were dosed for
one month, ISIS 14803 resulted in significant viral titer
reductions. In a second ongoing trial, in which patients were
dosed for three months, even more profound viral titer reductions
were observed in six of 17 patients. The safety and efficacy of
ISIS 14803 are being further evaluated in this ongoing 40 patient
Phase II trial. Data from each of these trials were presented in
November at the 53rd annual meeting of the American Association
for the Study of Liver Diseases (AASLD) Monday.
Orasense
Orasense is a joint venture to develop an oral delivery platform
for antisense drugs, and to develop an oral formulation of ISIS
104838, an antisense inhibitor of TNF-alpha, for the treatment of
rheumatoid arthritis. The collaboration will continue through the
remainder of this year, with Isis and Elan contributing funding
according to their ownership, 80.1 percent and 19.9 percent,
respectively. In 2003, Elan will have the option to extend or
conclude its participation in the Orasense collaboration.
In Orasense, multiple oral solid formulations of a second-
generation antisense drug are being evaluated in Phase I clinical
trials. Data from these trials will be presented at the 2002
annual meeting of the American Association of Pharmaceutical
Scientists (AAPS) in November.
"Through our Orasense collaboration we have shown it is feasible
to achieve oral systemic delivery of antisense oligonucleotides,"
stated Seamus Mulligan, Elan's Executive Vice President for
Corporate Business Development. "This represents a major
breakthrough in oral delivery of macromolecules. In addition, the
agreements with Isis are important steps in Elan's restructuring
efforts."
Isis will conduct a live webcast conference call to discuss this
release and the Company's third quarter financial results today,
Wednesday, November 6 at 8:30 a.m. Eastern time. To participate
over the Internet go to www.isispharm.com or to
http://www.firstcallevents.com/service/ajwz369610280gf12.html. A
replay of the webcast will be available at this address for up to
30 days.
Isis Pharmaceuticals, Inc. is exploiting its expertise in RNA to
discover and develop novel human therapeutic drugs. The company
has commercialized its first product, Vitravene(R) (fomivirsen),
to treat CMV-induced retinitis in AIDS patients. In addition,
Isis has 13 antisense products in its development pipeline with
two in late-stage development and six in Phase II human clinical
trials. Affinitac(TM), an inhibitor of PKC-alpha, is in Phase III
trials for non-small cell lung cancer, and alicaforsen (ISIS
2302), an ICAM-1 inhibitor, is in Phase III trials for Crohn's
disease. Isis has a broad patent estate as the owner or exclusive
licensee of more than 1,000 issued patents worldwide. Isis'
GeneTrove(TM) division uses antisense to assist pharmaceutical
industry partners in validating and prioritizing potential gene
targets through customized services. Ibis Therapeutics(TM) is a
division focused on the discovery of small molecule drugs that
bind to RNA. Additional information about Isis is available at
www.isispharm.com .
HepaSense(TM) is a trademark of HepaSense, Ltd.
Orasense(TM) is a trademark of OraSense, Ltd.
Affinitac(TM), a trademark of Eli Lilly and Company, is an
investigational cancer compound being developed through an
alliance between Lilly and Isis Pharmaceuticals, Inc. and
marketed globally by Lilly.
GeneTrove(TM) and Ibis Therapeutics(TM) are trademarks of Isis
Pharmaceuticals, Inc.
Vitravene(R) is a registered trademark of Novartis AG.
CONTACT: Kristina Peterson of Isis Pharmaceuticals, Inc.,
Phone: +1-760-603-2521
Home Page: http://www.isispharm.com
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CAPITALIA SPA: Moody's Downgrades Financial Strength Rating
-----------------------------------------------------------
Moody's Investors Service downgraded to C from C+ Capitalia Spa's
financial strength rating. The agency reaffirmed, meanwhile, the
bank's A2/P-1 long- and short-term deposit and debt ratings.
The rating action concludes the review for possible downgrade on
the bank's FSR.
While noting that the then-called Banca di Roma group benefited
from its integration with Bipop-Carire group, the rating agency
said it expects the bank's credit profile to continue to suffer
from legacy issues.
Moody's refers the legacy issues particularly to: "asset quality,
requiring high provisioning and temporarily hindering management
from renewing efforts to increase profitability and efficiency."
The rating agency noted in addition, difficulties in economic
condition, increased competition, difficulties in integration,
and the bank's ability to generate improvements.
The rating was assigned a stable outlook to reflect Moody's
confidence at the new management's strategy.
TELECOM ITALIA: To Push Ahead Next-Generation Mobile Services
-------------------------------------------------------------
Chief Executive Marco de Benedetti said Telecom Italia Mobile
(TIM) plans to start next-generation mobile services this year
ahead of its European rivals.
``We will open up the service this year and we will have a (3G)
network with reasonable coverage,'' the chief executive told the
Financial Times.
Other companies project to enter the market with the service in
2003.
Mr. Benedetti also expects to sell "tens of thousands" of
compatible handsets by year-end, with about 1,000 base stations
providng high-speed coverage for all of Italy's major cities.
TIM is the leading wireless telecommunications carrier in Europe,
with 24 million subscribers in Italy, placing it ahead of no.2
Italian mobile phone company Omnitel Pronto Italia. The carrier
uses the European digital standard, GSM, as well as an analog
network.
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ELEKTRIM SA: Announces Settlement with EMERITA B.V.
---------------------------------------------------
The Management Board of Elektrim S.A. announces that it has
executed a settlement with EMERITA B.V., Holland, as a result of
which Elektrim S.A., in exchange for a consideration of USD
2,400,000, will waive all rights to shares of companies the
shareholder of which is Poland Telecom Operators N.V. and rights
to shares of PT Centrala Sp. z o.o.
NETIA HOLDINGS: Reports 2002 Third Quarter Results
--------------------------------------------------
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 unaudited financial
results for the third quarter and the nine months ended September
30, 2002.
Financial Highlights:
- Revenues for Q3 2002 were PLN 152.4m (US$36.7m), a year-on-
year increase of 11%. Year-to-date revenues were PLN 450.4m
(US$108.6m), a year-on-year increase of 14%.
- One non-cash exceptional item of PLN 108.7m (US$ 26.2m)
affected financial results for Q3 2002, related to a provision
for impairment of fixed assets (27,350 connected lines and
100,975 ports installed on telecommunication switches).
- Adjusted EBITDA (before the provision for impairment of Fixed
assets) for Q3 2002 was PLN 48.7m (US$ 11.7m), representing an
adjusted EBITDA margin of 31.9%. Year-to-date adjusted EBITDA
before the above item improved to PLN 121.0m (US$ 29.2m), with an
adjusted EBITDA margin of 26.9%.
- Cash at September 30, 2002 was PLN 374.1m (US$90.2m),
excluding restricted investments of PLN 56.8m (US$13.7m).
- Consolidated shareholders' equity at the end of Q3 2002 was
negative PLN 1,166.0m or US$281.1m.
- The Restructuring Agreement relating to Netia's debt
restructuring, entered into by Netia, Telia AB, certain companies
controlled by Warburg Pincus & Co, certain financial creditors
and the ad hoc committee of noteholders on March 5, 2002,
continues to be implemented. Pursuant to the Restructuring
Agreement, Netia's existing notes and certain creditor's claims
under certain currency swap agreements will be exchanged for the
new notes with an aggregate principal amount of EUR 50m to be
issued by Netia Holdings B.V., Netia's Dutch finance subsidiary,
and Netia's ordinary shares representing 91% of Netia's share
capital immediately post-restructuring. The existing Netia
shareholders will retain 9% ownership of post-restructuring share
capital and will receive warrants to acquire shares representing
15% of Netia's post-restructuring share capital.
Additionally, up to 5% of the post-restructuring share capital,
excluding shares to be issued upon exercise of the warrants to be
issued to the existing shareholders will be issued under a key
employee stock option plan.
- All necessary share and warrant issuances in Netia's
restructuring have been approved by its shareholders. On October
25, 2002, Netia filed with the Polish Securities and Exchange
Commission an updated version of the prospectus, filed previously
in April 2002, relating to the issuance and registration of new
shares pursuant to the Restructuring Agreement. The updated
prospectus is currently being reviewed by the Polish SEC.
- Arrangement proceedings in Poland. The majority of creditors
of Netia, Netia Telekom S.A. ("Telekom") and Netia South Sp. Z
o.o., representing over 95%, 98% and 100% of total value of
claims, respectively, voted in favor of the arrangement plans.
The Polish court approved the arrangement plan for Netia and
Telekom on August 9, 2002 and June 25, 2002, respectively. The
approval of the arrangement plan for South is still pending.
- Agreement with the dissenting creditors who had previously
objected to the restructuring in the Polish arrangement
proceedings and the ancillary proceedings in the U.S. Bankruptcy
Court was signed on October 21, 2002. The parties agreed to
mutually release each other from any claims they may have
relating to Netia's restructuring in Poland, the Netherlands and
to Netia's investment account in the United States. Netia
believes that the Agreement will facilitate the consummation of
the restructuring to the benefit of all the Netia Group's
customers and stakeholders.
- Composition proceedings in the Netherlands. At the creditors'
meetings of its three Dutch finance subsidiaries held on October
28, 2002, 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
verification of the votes and the approval of the composition
plans will be held on November 6, 2002.
- The license fee payments amounting to approximately EUR 33m,
originally due in November and December 2001, were deferred until
December 31, 2002. In addition, a deferral fee, payable on
December 31, 2002, in the total amount of PLN 15.8m for the re-
scheduled license fee payments was imposed.
Operational Highlights:
- Netia's nationwide backbone network is comprised of 3,580 km
as of September 30, 2002.
- Subscriber lines decreased to 340,232 net of churn and
disconnections, a year-on-year decrease of 1%.
- Business customer lines increased to 103,209, a year-on-year
increase of 10%. The business segment reached 30.3% of total
subscriber lines while year-to-date revenues from business
customers accounted for 57% of telecom revenues as of September
30, 2002.
- New, more competitive tariff plans for international long-
distance connections were introduced on November 1, 2002.
- Average revenue per line decreased by 2% to PLN 120 in
September 2002, compared to PLN 122 in September 2001 as a result
of price erosion. On the other hand, revenue growth benefited
from increased sales of data, carrier's carrier and other non-
direct voice services.
- Headcount decreased to 1,283 at September 30, 2002 from 1,639
at September 30, 2001 as a result of management's program of cost
reduction initiated in August 2001.
Other Highlights:
- Wojciech Madalski was appointed Chief Executive Officer and
President of the Management Board of Netia Holdings S.A.,
effective September 17, 2002.
- Extraordinary Shareholders' Meeting of Netia Holdings S.A.
held on August 30, 2002 adopted resolutions pursuant to which the
mandates of its Supervisory Board members appointed in 1999,
i.e., Jan Guz, Donald Mucha and David Oertle, shall expire in
2003 at Netia's Ordinary General Shareholders'Meeting to be
convened to approve its financial statements for the financial
year 2002.
- Netia's American Depository Shares were de-listed from The
Nasdaq Stock Market, effective October 15, 2002. Netia has
requested a review of this decision by the Nasdaq Listing and
Hearing Review Council.
Wojciech Madalski, Netia's President and Chief Executive Officer
commented:
"Third quarter revenues increased by 11% year-on-year as Netia
continued to expand its business customer base in a difficult
economic environment. As a result of this and cost reduction
efforts our adjusted EBITDA margin continued to increase. New
efforts are being undertaken to strengthen Netia's sales and
marketing and customer service focus in order to drive top-line
growth, taking advantage of Netia's advanced technological
infrastructure and service offering.
"We are targeting to complete Netia's restructuring by year-end
2002. This will give Netia a solid capital structure for the
future."
Avi Hochman, Chief Financial Officer of Netia, added: "This has
indeed been a busy and productive quarter for the financial and
operational restructuring of Netia. We made significant progress
in the process of restructuring Netia's debt.
"We are also strengthening our balance sheet to reflect Netia's
intensifying focus on business customers in profitable urban
areas. This resulted in a decision to book an impairment charge
in relation to a number of telephone lines in other areas on
which we do not expect to generate adequate returns.
"Lastly, our revenue growth initiatives are complemented by
continuing programs to increase efficiency and strengthen Netia's
competitive position. This has contributed significantly to the
third quarter growth in positive adjusted EBITDA to PLN 48.7m and
an adjusted EBITDA margin increase to 31.9%."
Financial Information
2002 Year to Date vs. 2001 Year to Date
Revenues increased by 14% to PLN 450.4m (US$108.6m) during the
nine-month period ended September 30, 2002 compared to PLN 394.0m
for the same period in 2001.
Revenues from telecommunications services increased by 17% to PLN
436.7m (US$105.3m) from PLN 372.9m in the corresponding period of
2001. The increase was primarily attributable to an increase in
the number of business lines and an increase in business mix of
lines as well as expansion of new products, such as indirect
domestic long distance, data transmission and wholesale services.
An exceptional non-cash item of PLN 108.7m (US$ 26.2m) impacted
the financial results for the period and was related to the
provision for the impairment of fixed assets. This provision
relates to our investment in 27,350 connected lines and 100,975
ports, which were located outside the main geographic areas of
strategic interest to Netia. The above provision follows the
impairment of goodwill and fixed assets of PLN 317.1m recorded in
Q3 2001, as a continued effort to solidify our balance sheet. The
majority of ports affected by this provision are associated with
the past write-off of 70,200 connected lines.
Adjusted EBITDA (before the provision for impairment of fixed
assets) increased by 147% to PLN 121.0m (US$ 29.2m) for the first
nine months of 2002 from PLN 48.9m for the same period in 2001.
Adjusted EBITDA margin increased to 26.9% from 12.4%. This
increase was achieved thanks to a successful implementation of
Netia's cost reduction program in late 2001, part of our effort
to preserve cash, and increase revenues from new products.
"Other operating expenses" decreased by 12% to PLN 233.6m
(US$56.3m) for the nine-month period ended September 30, 2002,
from PLN 265.5m for the corresponding period in 2001. "Other
operating expenses" represented 52% of total revenues for the
nine-month period ended September 30, 2002, compared to 67% for
the same period in 2001, with salaries and benefits being the
main item. Salaries and benefits decreased year-on-year by 14% to
PLN 89.8m (US$ 21.6m) for the nine-month period ended September
30, 2002 from PLN 105.0m for the first nine months of 2001,
mainly as a result of the headcount reduction program. In
addition, "other operating expenses" recorded for the nine-month
period ended September 30, 2001 included an allowance for
receivables from Millennium Communications S.A. of PLN 16.9m.
Interconnection charges were PLN 89.5m (US$21.6m) for the nine-
month period ended September 30, 2002 as compared to PLN 89.7m
for the first nine months of 2001. Interconnection charges as a
percentage of calling charges decreased to 29% from 34%,
reflecting the increased proportion of traffic carried through
Netia's own backbone network.
Depreciation of fixed assets increased by 20% to PLN 152.2m
(US$36.7m) from PLN 126.7m for the nine-month period ended
September 30, 2001, as the construction stage of additional parts
of the network was completed.
Amortization of other intangible assets increased by 33% to PLN
54.8m (US$13.2m) from PLN 41.1m for the nine-month period ended
September 30, 2001, due to an increased level of amortization of
computer software costs associated with our information
technology systems.
Net financial expenses increased to PLN 634.4m (US$152.9m) for
the nine-month period ended September 30, 2002 from PLN 389.3m
for this period in 2001, due to foreign exchange losses resulting
from the significant depreciation of the Polish zloty against the
euro and U.S. dollar during the first nine months of 2002
compared to relatively stable level of foreign exchange rates
during the same period of 2001. Additionally, interest costs on
the notes issued by Netia accrued through the whole nine-month
period ended September 30, 2002 although Netia ceased to pay
interest on its notes in December 2001. In accordance with Dutch
law, the interest on notes accrues until the composition
proceedings are finalized. Upon completion of Dutch moratorium
proceedings, financial costs accrued during the period of the
proceedings shall be reversed.
Net loss decreased by 5% to PLN 823.6m (US$198.5m), compared to a
net loss of PLN 862.8m for the first nine months of 2001. The
loss for the period was attributable to an increase in net
financial expenses related mainly to unrealized foreign exchange
losses. However, a majority of the financial expenses are non-
cash items that do not impact Netia's cash flows. In addition,
the amount of net loss for the first nine months of 2001 was
impacted by three exceptional items totaling PLN 334.1m.
Cash used in investing activities decreased by 61% to PLN 221.1m
(US$53.3m) for the nine-month period ended September 30, 2002,
from PLN 570.3m for the same period of 2001, in accordance with
the revised business plan approved in late 2001, aimed at
preserving cash.
Cash and cash equivalents at September 30, 2002 amounting to PLN
374.1m (US$90.2m) were available to fund Netia's operations.
Netia also had deposits in an investment account of PLN 56.8m
(US$13.7m) at September 30, 2002 established, subject to
conditions, to service the interest payments on its 2000 Senior
Notes in June 2002. These deposits are expected to be transferred
to the Company in accordance with the Restructuring Agreement at
the completion of the restructuring.
Q3 2002 vs. Q2 2002
Revenues increased by 1% to PLN 152.4m (US$36.7m) for Q3 2002
compared to PLN 151.4m for Q2 2002. This increase was
attributable to a 2% increase in telecommunications revenues to
PLN 149.1m (US$35.9m) in Q3 2002 from PLN 146.9m in Q2 2002 and a
27% decrease in other revenues, representing the operations of
Uni-Net, a joint venture with Motorola offering radio trunking
services, to PLN 3.3m (US$0.8m) for Q3 2002 from PLN 4.5m in Q2
2002.
Adjusted EBITDA for Q3 2002 increased by 15% to PLN 48.7m
(US$11.7m) from PLN 42.2m in Q2 2002. Adjusted EBITDA margin
increased to 31.9% for Q3 2002 from 27.9% for Q2 2002. The
increase in adjusted EBITDA and adjusted EBITDA margin was mainly
a result of the strict cost control policy implemented in late
2001 and increase in revenues from new products.
Net loss amounted to PLN 328.1m (US$79.1m) in Q3 2002, compared
to a net loss of PLN 250.0m in Q2 2002. The increase in net loss
was mainly due to the impairment charge of PLN 108.7m (US$26.2m)
related to the exceptional item recorded in Q3 2002.
Operational Review
Connected lines at September 30, 2002 amounted to 503,358 lines.
The number of connected lines decreased in comparison with the
numbers reported for Q2 2002 and Q3 2001 due to provision for
impairment of 27,350 connected lines.
Subscriber lines in service decreased by 1% to 340,232 at
September 30, 2002 from 343,634 at September 30, 2001 and by 1%
from 342,145 at June 30, 2002. The number of subscriber lines is
net of customer churn and disconnections by Netia of defaulting
payers, which amounted to 8,257 and 5,341, respectively, for Q3
2002 and 19,599 and 18,550, respectively, for the first nine
months of 2002. The recorded churn was mostly due to the
deterioration of Polish economic conditions, which affected our
customers and customers moving outside the coverage of Netia's
network.
Business lines as a percentage of total subscriber lines reached
30.3%, up from 27.3% at September 30, 2001 and 29.8% at June 30,
2002, reflecting the intensified focus on the corporate and SME
market segments. Business customers accounted for all net
additions in the quarter while the residential segment saw net
disconnections. Revenues from business customers accounted for
57% of telecommunications revenues for the nine-month period
ended September 30, 2002.
Business customer lines in service increased by 10% to 103,209 at
September 30, 2002 from 93,713 at September 30, 2001 and by 1%
from 101,997 at June 30, 2002.
Average monthly revenue per line decreased by 2% to PLN 120 (US$
29) for September 2002, compared to PLN 122 for September 2001
and decreased by 2% from PLN 123 for June 2002.
Average monthly revenue per business line amounted to PLN 226
(US$ 54) for September 2002, representing a 7% decrease from PLN
243 for
Average monthly revenue per residential line amounted to PLN 73
(US$ 18) for September 2002, representing a 4% decrease from PLN
76 for September 2001 and a 1% decrease from PLN 74 for June
2002.
New, attractive tariff plans for international long-distance
connections were introduced on November 1, 2002, to replace the
current tariffs for these services offered both on standard lines
and on Voice over Internet Protocol ("VoIP") technology.
New tariff packages for indirect domestic long-distance
(customers of Netia 1 Sp. z o.o. ("Netia 1")) and ISDN services
were introduced on June 1, 2002. These new packages supplement
the current Netia tariff offerings, providing easy-to-understand
tariff plans with the usage time measured on a per-second basis.
As of October 15, 2002, the ISDN Multi service customers on the
per-second tariff can also choose to pay their bills for analog
and ISDN Duo connections according to this plan.
Netia 1055 Internet telephony service, which offers cheaper
international calls based on VoIP technology, was launched on
July 1, 2002. The new service complements Netia's existing
service offerings of Netia 1, a provider of indirect domestic
long-distance service through Netia's prefix (1055).
Connections to mobile networks at competitive pricing levels were
offered to Netia 1055 customers as of August 1, 2002, further
enhancing Netia's indirect domestic long-distance services.
Internet flat rate service was launched for Netia directly and
non-directly connected users of Internet dial-up access as well
as for Netia customers using ISDN Duo lines on April 16, 2002,
June 17, 2002, and July 5, 2002, respectively. The new service
enables a specified number of hours of Internet access each month
for a flat rate.
Netia's nationwide backbone network connecting Poland's largest
urban areas now stretches to 3,580 kilometers and consists of
2,470 kilometers of fiber and 1,110 kilometers of leased lines.
Netia is constructing additional infrastructure, planned for
completion in 2002, of approximately 960 kilometers.
Headcount at September 30, 2002 was 1,283, compared to 1,639 at
September 30, 2001 and 1,323 at June 30, 2002. During 2001 Netia
made announcements on headcount reductions of approximately 20%,
and finalization of this program is being carried out.
The number of active lines in service per employee increased by
26% to an average of 270 in Q3 2002, from 215 in Q3 2001. The
number of active lines in service per employee in the first nine
months of 2002 increased by 24% to an average of 261 compared to
211 in the same period last year.
Monthly average telecommunications revenue per employee increased
by 43% to PLN 39,451 in Q3 2002 from PLN 27,523 in Q3 2001.
Monthly average telecommunications revenue per employee in the
nine months ended September 30, 2002 increased by 43% to PLN
37,276 compared to PLN 26,078 for the same period last year.
License payments. The Polish Minister of Infrastructure decided
on June 28, 2002 to postpone the payment of license fee
installments of certain Netia operating subsidiaries, originally
due in November and December 2001, until December 31, 2002.
Previously, on November 30, 2001 and January 19, 2002, the
Minister of Infrastructure announced his decision to postpone the
payment of these installments until January 20, 2002 and June 30,
2002, respectively. The current total amount of these
installments is approximately EUR 33 million. A deferral fee of
PLN 15.8m is due in December 2002. Netia submitted claims to the
competent Polish regulatory authorities seeking to confirm
expiry, cancellation or deferral of its remaining license fee
obligations, following the regulatory changes introduced with the
enactment of the new Telecommunications Act on January 1, 2001.
Changes in capital base of Netia 1, a provider of indirect
domestic long-distance services. Netia Holdings S.A. and the
Warsaw electric utility, Stoen S.A. ("Stoen"), agreed on July 2,
2002 that Stoen will acquire 133,233 existing shares of Netia in
exchange for Stoen's 87,332 shares in Netia 1. The agreement was
entered into pursuant to the Netia 1 consortium agreement and as
a consequence of changes in the new Polish telecom law effective
as of January 1, 2001, abolishing the foreign ownership
restrictions on telecom operators in Poland. As a result of the
transaction, the Netia group companies jointly own an 89% stake
in Netia 1. The remaining 11% stake is owned by Telia AB.
The Polish Chamber of Commerce Arbitration Court dismissed the
direct claims of Millennium Communications S.A. and Newman
Finance Corporation against Netia for: (i) declaration of the
Share Subscription Agreement dated August 8, 2000 void and
ineffective and (ii) payment of PLN 11.5m by Netia. The
Arbitration Court also dismissed Netia's counter-claim for
damages in the amount of PLN 8.5m. Netia intends to petition the
proper court of law to set aside the Arbitration Court's ruling,
claiming, among other things, material breaches of material law
and arbitration procedures by the Arbitration Court. A separate
litigation by Netia against Millennium for the repayment of a
loan in the amount of PLN 11.5m is still pending before the
District Court in Warsaw.
Key Figures
PLN'000 YTD 02 YTD 01 3Q02 2Q02
-----------------------------------------------------------------
Revenues 450,372 393,983 152,396 151,416
Adjusted EBITDA(3) 121,028 48,872 48,689 42,249
Margin % 26.9% 12.4% 31.9% 27.9%
Net loss before FX (509,662) (788,881) (237,506) (130,078)
Net profit / (loss)
after FX (823,548) (862,808) (328,131) (250,010)
Net debt(2) 3,271,657 2,775,926 3,271,657 3,201,760
EBIT (194,677) (470,959) (133,136) (24,567)
1Q02 4Q01 3Q01
-----------------------------------------------------------------
Revenues 146,560 144,868 136,789
Adjusted EBITDA(3) 30,090 29,294 17,745
Margin % 20.5% 20.2% 13.0%
Net loss before FX (142,078) (516,166) (495,795)
Net profit / (loss)
after FX (245,407) (286,409) (761,020)
Net debt(2) 3,063,715 2,862,423 2,775,926
EBIT (36,974) (57,940) (383,261)
-----------------------------------------------------------------
US$'000(1) YTD 02 YTD 01 3Q02
2Q02
-----------------------------------------------------------------
Revenues 108,570 94,977 36,738
36,502
Adjusted EBITDA(3) 29,176 11,781 11,738
10,185
Margin % 26.9% 12.4% 31.9%
27.9%
Net loss before FX (122,863) (190,174) (57,255)
(31,358)
Net profit /
(loss) after FX (198,532) (207,996) (79,102)
(60,270)
Net debt(2) 788,693 669,188 788,693
771,843
EBIT (46,930) (113,533) (32,095)
(5,922)
1Q02 4Q01 3Q01
-----------------------------------------------------------------
Revenues 35,331 34,923 32,976
Adjusted EBITDA(3) 7,254 7,062 4,278
Margin % 20.5% 20.2% 13.0%
Net loss before FX (34,251) (124,431) (119,521)
Net profit /
(loss) after FX (59,160) (69,044) (183,458)
Net debt(2) 738,565 690,040 669,188
EBIT (8,913) (13,968) (92,392)
-----------------------------------------------------------------
(1) The US$ amounts shown in this table and in the entire
document have been translated using the exchange rate of PLN
4.1482 = US$1.00, the average rate announced by the National Bank
of Poland at September 30, 2002. These figures are included for
the convenience of the reader only.
(2) Net debt is defined as current maturities of long-term
debt less cash and restricted investments.
(3) We define EBITDA as net income/(loss) as measured by IAS or
U.S. GAAP, adjusted for depreciation and amortization, net
financial expense, income taxes, minority interest, share of
losses of equity investments and other losses and gains on
dilution. EBITDA for 2001 and 2002 has been further adjusted for
impairment of goodwill, provisions for fixed assets, effects of
default on long-term debt and cancellation of swap transactions
and is therefore defined as Adjusted EBITDA. We believe EBITDA
and related measures of cash flow from operating activities serve
as useful supplementary financial indicators in measuring the
operating performance of telecommunication companies. EBITDA is
not an IAS or U.S. GAAP measure and should not be considered as
an alternative to IAS or U.S. GAAP measures of net income/(loss)
or as an indicator of operating performance or as a measure of
cash flows from operations under IAS or U.S. GAAP or as an
indicator of liquidity. You should note that EBITDA is not a
uniform or standardized measure and the calculation of EBITDA,
accordingly, may vary significantly from company to company,
and by itself provides no grounds for comparison with other
companies.
Key operational indicators
3Q02(1) 2Q02 1Q02 4Q01 3Q01
------- ------- ------- ------- -------
Network data
Number of connected
lines (cumulative) 503,358 529,658 527,562 526,402 519,035
Subscriber data
Subscriber
lines (cumulative) 340,232 342,145 342,288 343,802 343,634
Total net additions (1,913) (143) (1,514) 168 5,296
Business net additions 1,212 1,434 2,569 4,281 5,721
Business subscribers
(cumulative) 103,209 101,997 100,563 97,994 93,713
Business mix of
total subscriber lines 30.3% 29.8% 29.4% 28.5% 27.3%
Average monthly
revenue per line (PLN) 120(2) 123(2) 130 122 122
Average monthly revenue
per business line (PLN) 226(2) 236(2) 251 225 243
Average monthly revenue
per residential line (PLN)73 74 79 81 76
(1) The number of connected lines reported for Q3 2002 has been
recalculated in order to reflect the impairment of 27,350 lines
due to the future limited utilization of certain existing parts
of Netia's local access network.
2) Average monthly revenue per line and per business line
excludes the revenues from carrier's carrier services.
Income statement (according to IAS), unaudtied
(PLN in thousands unless otherwise stated)
Time periods: YTD 02 YTD 01 3Q02 2Q02
-------- -------- -------- --------
Telecommunications
Revenue 436,691 372,894 149,060 146,874
Other revenue 13,681 21,089 3,336 4,542
Total revenues 450,372 393,983 152,396 151,416
Interconnection charges (89,532) (89,738) (29,982) (30,168)
Cost of equipment (6,172) (6,805) (2,032) (2,063)
Other operating
expenses (233,640) (265,512) (71,693) (76,936)
Adjusted EBITDA 121,028 48,872 48,689 42,249
Margin (%) 26.9% 12.4% 31.9% 27.9%
Provision for receivables
subject to court settlements 0 (16,944) 0 0
Depreciation of
fixed assets (152,191) (126,664) (54,905) (48,513)
Amortization of
intangible assets (54,825) (41,145) (18,231) (18,303)
Amortization and
impairment of goodwill 0 (238,217) 0 0
Impairment provision
for fixed assets (108,689) (96,861) (108,689) 0
EBIT (194,677) (470,959) (133,136) (24,567)
Margin (%) -43.22% -119.5% -87.4% -16.2%
Net financial
income / (expenses) (634,397) (389,324) (202,113) (224,607)
Loss before tax (829,074) (860,283) (335,249) (249,174)
Tax charges (2,218) (4,426) (893) (676)
Minority share in (profit)/
loss of subsidiaries 7,744 1,901 8,011 (160)
Net loss (823,548) (862,808) (328,131) (250,010)
Margin (%) -182.9% -219.0% -215.3% -165.1%
Loss per share
(not in thousands) (26.69) (28.00) (10.61) (8.11)
Weighted average number
of shares outstanding
(not in thousands) 30,854,382 30,817,291 30,927,353 30,817,291
Note to financial expenses
Net Interest Expense (320,511) (286,082) (111,488) (104,675)
Net Foreign
Exchange gains/(losses)313,886) (73,927) (90,625) (119,932)
Fair value losses on cross
currency swap transactions 0 (29,315) 0 0
Balance sheet (according to IAS, unaudited)
(PLN in thousands unless otherwise stated)
Time Periods Sept. 30, Dec. 31,
------------ 2002 2001
-------- --------
Cash and cash equivalents 374,100 486,946
Restricted investments 56,802 47,500
Accounts receivable
Trade, net 87,402 91,838
Government 6,122 15,179
Other, net 6,649 3,510
Inventories 1,548 1,708
Prepaid expenses 9,737 9,358
Total current assets 542,360 656,039
Investments 1,061 1,949
Fixed assets, net 2,278,213 2,454,309
Computer software, net 104,195 82,944
Licenses, net 647,272 695,149
Other long term assets 60,999 13,957
Total non-current assets 3,091,740 3,248,308
TOTAL ASSETS 3,634,100 3,904,347
Current maturities of long term debt 3,702,559 3,396,869
Short term liabilities for licenses 190,793 165,613
Accounts payable and accruals
Trade 77,056 170,779
Liability connected with swaps cancellation 203,882 224,907
Accruals and other 491,583 163,561
Deferred income 7,520 7,495
Total current liabilities 4,673,393 4,129,224
Long term liabilities for licenses 109,640 92,764
Total non-current liabilities 109,640 92,764
Minority interest 17,064 25,607
Share capital 203,285 203,285
Share premium 1,713,865 1,713,865
Treasury shares (2,812) (3,611)
Accumulated deficit (3,080,335)(2,256,787)
Total shareholders' deficit (1,165,997) (343,248)
TOTAL LIABILITIES AND DEFICIT 3,634,100 3,904,347
Cash flow statement (according to IAS), unaudited
(PLN in thousands unless otherwise stated)
Time periods: YTD 02 YTD 01 3Q02 2Q02
------------- -------- -------- -------- --------
Net Loss (823,548) (862,808) (328,131) (250,010)
Adjustment to reconcile net
loss to net cash provided
by operating activities
Depreciation and
amortization of goodwill207,016 185,747 73,136 66,816
Amortization of
discount on notes 0 95,009 0 0
Minority interest (7,744) (1,901) (8,011) 160
Interest expense
accrued on long
term debt 314,951 232,372 109,520 102,436
Interest expense accrued
on license liabilities 15,890 12,009 5,387 5,534
Impairment of goodwill 0 220,279 0 0
Impairment provision
for fixed assets 108,689 96,861 108,689 0
Allowance for debtors
subject to court
settlements 0 16,944 0 0
(Increase)/decrease
in long term assets 0 1,425 0 0
Foreign exchange
(gains) / losses 317,397 78,273 88,412 125,199
Change in working capital 20,052 71,155 24,473 (931)
Net cash provided
by operating activities 152,703 145,365 73,475 49,204
Purchase of fixed assets
and computer software (221,071) (513,881) (56,299) (72,710)
(Increase) / decrease
of investments 0 8,500 0 0
Purchase of
minority interest 0 (60,883) 0 0
Payments for licenses 0 (3,998) 0 0
Net cash used
in investing
activities (221,071) (570,262) (56,299) (72,710)
Payment of interest
on long term debt 0 (55,220) 0 0
Increase of restricted cash 0 (7,135) 0 0
Payments related
to restructuring (46,739) 0 (13,851) (12,401)
Payment for cancellation
of swap transactions (29,279) 0 0 0
Net cash used
in financing
activities (76,540) (62,355) (13,851) (12,401)
Effect of exchange rate
change on cash and cash 31,540 (12,210) 5,838 11,645
equivalents
Net change in cash
& cash equivalents (112,846) (499,462) 9,163 (24,262)
Cash & cash equivalents at
the beginning
of the period 486,946 1,142,850 364,937 389,199
Cash & cash equivalents
at the end of the period374,100 643,388 374,100 364,937
CONTACT: NETIA HOLDINGS S.A.
Anna Kuchnio (IR)
Phone: +48-22-330-2061
Jolanta Ciesielska (Media)
Phone: +48-22-330-2407
or
Taylor Rafferty, London
Alexandra Jones
Phone: +44-(0)20-7936-0400
or
Taylor Rafferty, New York
Jeff Zelkowitz
Phone: 212/889-4350
=====================
S W I T Z E R L A N D
=====================
ABB LTD.: S&P Lowers Long-Term Corp Credit Rating to `BBB-`
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Switzerland-based engineering services
group ABB Ltd. to triple-'B'-minus from triple-'B'-plus.
At the same time, ABB's short-term corporate credit rating was
lowered to 'A-3' from 'A-2', and the Nordic Scale short-term
rating to 'K-3' from 'K-1'.
S&P, meanwhile, affirmed its single-'A'-minus long-term
counterparty credit and insurer financial strength ratings on
Sweden-based Sirius International Insurance Corp., the group's
insurance entity. The outlook on Sirius is negative.
According to the rating agency, the action reflects "the group's
weak operating performance, restructuring challenges, and
continuing uncertainties on asbestos litigation."
While acknowledging the group's effort to address the issues,
Standard & Poor's credit analyst Maria Bissinger warned of the
measure's implementation risk. She cited as an example
significant additional restructuring charges for ABB's planned
annual cost savings of US$800 million.
S&P affirmed ABB's progress toward a prepackaged Chapter 11
settlement for the asbestos liability of Combustion Engineering,
its US operation. The rating agency, however, noted that the
results still remaint to be seen.
The ratings were placed on CreditWatch with negative implications
due to an existing medium-term obligation with banks. S&P expects
ABB to secure sufficient committed credit lines beyond the expiry
of its key US$1 billion bank line in December 2002.
ABB: Wallenberg Increases Holdings To 6.8%, Shares Gain
-------------------------------------------------------
The holding company of Wallenberg, Sweden's influential family,
has increased its stake in the troubled Swiss-Swedish engineering
group ABB from 4.8% to 6.8%.
Marcus Wallenberg, chief executive of Investor, said "We see this
as an interesting investment and believe in the company's long-
term potential."
The investor is thought to have spent about SFR50 million (US$34
million) to acquire 24.2 million shares.
The acquisition of the shares is believed to have helped the
group show strong gains in the market. ABB's shares closed
nearly 46 per cent higher at SFR2.45 on Monday, the day of the
buy-out.
The decision of the investor to increase its holding reflect the
reduced influence of Swiss financier Martin Ebber who recently
stepped down from the group's board, says the Financial Times.
The Swiss-Swedish engineering group is seeking to reduce US$4.1
billion net debt at the start of 2002 by at least US$1.5bn this
year
ABB: EU Clears Sale of Structured Finance Business to GE
--------------------------------------------------------
ABB, the leading power and automation technology group, welcomed
the announcement by the European Commission that it has approved
the sale of ABB's Structured Finance business to GE Commercial
Finance.
ABB said the cash proceeds of about US$ 2.3 billion would be used
to cut its debt and strengthen its balance sheet. The transaction
is scheduled to be closed on November 29, 2002.
"We welcome the European Commission's decision. We are on track
to meet our net debt reduction target by the end of 2002," said
Peter Voser, ABB's chief financial officer.
ABB said it would reduce net debt, which was US$ 4.1 billion at
the start of 2002, by at least US$ 1.5 billion this year. "With
this sale, other asset divestments already announced and cash
from operations, we are confident that we will reach our target,"
said Voser.
The sale has also been approved in the United States. Formal
approval from the Swedish Financial Supervisory Authority is
expected well in advance of closing.
ABB said the sale of Structured Finance is part of the company's
strategy to focus on core areas of power and automation
technology.
Under the deal, ABB sold most of its Structured Finance business.
The aircraft leasing business, the ABB Export Bank, and the 35
percent equity stake in the Swedish Export Credit Corporation,
which were not part of the agreement, are expected to be
divested. Approximately US$ 250 million of these assets have been
sold since July 1, 2002.
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 146,000 people.
CONTACT: ABB Corporate Communications, Zurich
(Investor Relations)
Switzerland: Tel. +41 43 317 3804
Sweden: Tel. +46 21 325 719
USA: Tel. +1 203 750 7743
E-mail: investor.relations@ch.abb.com
CREDIT SUISSE: Fitch Affirms B+ Class E & CCC Class F-2 Ratings
---------------------------------------------------------------
Credit Suisse First Boston Mortgage Securities Corporation's
multifamily mortgage pass-through certificates, series 1995-M1,
are affirmed by Fitch Ratings as follows: $39.5 million class A
at 'AAA', $5.5 million class B at 'AA', $7.8 million class C at
'A', $2.7 million class D at 'BBB-', $5.1 million class E at
'B+', $1.5 million class F-1 and $1.2 million class F-2 at
'CCC'. Fitch has also affirmed the interest-only class A-X at
'AAA'. Classes G-1 and G-2 are not rated by Fitch. The rating
actions follow Fitch's annual review of the transaction, which
closed in April 1995.
The transaction, which is collateralized by multifamily
properties subject to low income housing tax credits, had a
balance of $66.7 million as of October 2002, reflecting a 14%
decline from the balance at issuance. The three largest
geographic concentrations were FL (25% of the outstanding
balance), AZ (13%) and GA (13%).
The transaction's performance has deteriorated, however, given
the current credit enhancement levels and the existence of tax
credits for the majority of the loans, Fitch affirmed the
transaction. Fitch was provided with year-end 2001 financials
for 24 of the 25 properties securing the transaction
(approximately 98% by principal balance). On a comparable basis,
the YE 2001 weighted-average debt service coverage ratio, at
0.88 times, was lower than the YE 2000 DSCR of 0.99x and DSCR at
issuance of 1.20x. As of the date of this review, four assets,
accounting for 3.5% of the outstanding balance, were 90-days
delinquent and one asset, accounting for 2.5% of the outstanding
balance was real estate-owned. These five assets are currently
in special servicing with GE Capital Realty Group Inc.
All five specially serviced assets have the same borrower;
however, they are not cross-collateralized and cross-defaulted.
The four 90-day delinquent assets are secured by properties
located in Arizona. These four loans have had chronic
delinquency issues. In 1998, the borrower filed for bankruptcy
protection. In 1999, the borrower emerged from bankruptcy. Loans
were kept current until the middle of 2002. A receiver is in
place in all four properties and foreclosure should take place
shortly. The fifth specially serviced loan, currently REO, is
secured by a property in Ohio. This loan has been in special
servicing since 1998. An auction has been scheduled to take
place this month. Losses are expected.
Aside from the specially serviced loans, nine loans, accounting
for 34% of the outstanding balance, had a YE 2001 DSCR below
1.0x. This was a significant increase when compared to YE 2000
when 12% of the outstanding balance had a DSCR below 1.0x.
Fitch's concern with the high proportion of loans with a DSCR
below 1.0x was mitigated by the fact that none of these loans
are delinquent and the fact that seven of the nine loans still
have tax credits. The existence of tax credits should serve as
an incentive for borrowers to remain current so as to avoid the
possibility of lost tax credits and recapture.
Fitch's analysis and rating actions take into account the
specially serviced assets and the high proportion of loans with
a DSCR below 1.0x.
SWISS LIFE: May See Its Board Members Reshuffled
------------------------------------------------
Insurer Swiss Life is expected to announce a boardroom shake-up
in an effort to pave the way for a successful SFR1.2-billion
(US$820) rights issue next week, says the Financial Times.
The company launched an emergency board meeting Monday, mounting
speculations about the future of the company's top officials
following the disclosure of the company's investment vehicle
believed to serve the company's top people.
The executives whose term in the company are thought to be in the
balance are Mr Leuenberger, Gerold Bhrer, a leading Swiss
politician and Swiss Life director, and Roland Chlapowski, Swiss
Life's new chief executive.
The investment vehicle, Long Term Strategy, was set up to allow
the insurer's executives co-invest alongside Swiss Life
According to the report, although the practice is fairly
widespread in the private equity industry, the case of Swiss Life
became controversial when it emerged that six executives had
tripled their money on LTS at a time when Swiss Life's own
investment performance was declining.
The investment vehicle was closed down but the issues it left
have not yet died down.
===========================
U N I T E D K I N G D O M
===========================
AMEY PLC: GBP11.4M Working Capital Guarantees Appear "Illegal"
--------------------------------------------------------------
Services company Amey had raised GBP11.4 million of working
capital from the Bank of Scotland with financial guarantees that
may be illegal under European law, says Times Online.
Tube Lines consortium, of which Amey has a one-third share, in
August appealed to London Transport, the Government's Tube
operator, for financial guarantees.
London Transport allegedly agreed to pay Tube Lines GBP35 million
for "agreed bid costs" for the Public Private Partnership (PPP)
for the London Underground. Tube Lines was asking the guarantees
because of the delays caused by Transport for London's (TfL)
legal challenges to the PPP.
Buf London Transport denied the guarantee saying it only
"confirmed the amount that will be paid to Tube Lines under the
existing bid cost support arrangements".
The matter caught the attention of TfL prompting Commissioner Bob
Kiley to charge London Transport of using public money to
guarantee a private company reportedly having financial
difficulty.
TfL maintained that the guarantee amounted to state aid, which
under European rules must be approved by the EU Commission to be
rendered valid.
BRITISH ENERGY: Innogy Denies Specific Deal of BE's Bail-out
------------------------------------------------------------
Power supplier Innogy denied offering to buy power from British
Energy at above market rates to help the struggling nuclear
generator, says the Financial Times.
The declaration came after report that rival generators are said
to be willing to buy electricity from the nuclear group at long-
term contracts.
As revealed by Times Online, the contracts "would be struck at a
small premium to prevailing market prices..."
While Brian Count, Innogy chief executive, confirmed it had said
it is willing to help the government keep the operation of the
electricity market while the state decides on the future of
British Energy, he denied making specific offers of a long-term
power purchase contract above market rates to BE or DTI
officials.
British Energy's GBP650-million (US$1 billion) emergency loan
expires at the end of the month. The ministers would have then to
decide whether to extend the fund or allow the nuclear generator
to go into administration.
Innogy, one of Britain's biggest power suppliers, is understood
to have told officials that it would support the government's
efforts to maintain operation of the market if British Energy was
forced into administration.
COOKSON GROUP: Issues Third Quarter Trading Update
--------------------------------------------------
Sales for Cookson's continuing activities were o445 million in
the third quarter of 2002, 1% lower than the same quarter last
year. In spite of this, Group operating profit for continuing
activities of o13 million was o11 million higher than the third
quarter last year, with an improvement registered by each of the
three divisions. This underlines the benefits of the cost saving
initiatives implemented over the last eighteen months.
As indicated at the time of the Group's interim results on 19
July, activity in the third quarter is traditionally quieter than
the second quarter due to routine summer holiday factory
shutdowns by many of the Group's customers in the USA and Europe.
Consequently, activity levels in July and August were, as
expected, lower than those of the second quarter of 2002.
Thereafter, Group sales in September increased to the same
average weekly sales as June 2002, which were the highest since
May 2001.
In the Electronics division, sales were o173 million, 3% lower
than the same quarter last year. Sales for September were higher
than July and August and only marginally lower than June 2002.
The division's sales performance has been consistent with
industry trends, with demand in the USA and Europe remaining
depressed but the Asia-Pacific region relatively buoyant. Asia-
Pacific currently accounts for some 35% of the division's sales.
Despite lower sales in the third quarter, the division's
operating profit improved by o8 million over the corresponding
period last year, mainly as a result of a markedly lower cost
base.
The Assembly Materials (Alpha-Fry) and PWB Chemicals (Enthone)
sectors of the Electronics division both continued to operate
profitably with sales versus the same quarter last year
marginally below and unchanged respectively. The Equipment sector
(Speedline) operated at a loss in the third quarter, albeit
significantly smaller than last year, with sales marginally down
on the third quarter of 2001; nevertheless, the Equipment
sector's order book improved during the quarter. The PWB
Laminates (Polyclad) sector also recorded a smaller operating
loss than the third quarter of 2001 on lower sales than last
year.
It has been decided to optimize the installed production capacity
of Polyclad's US operations by amalgamating Polyclad's two US
West Coast facilities. This initiative will incorporate an
investment of some o4 million in new equipment which will ensure
that total production capacity is maintained and will result in
better yields, enhanced production efficiencies and meaningful
cost savings. The total exceptional charge for this programme
will be o6 million, primarily related to asset write-downs. Most
of the cash for the project will be outlaid in 2003 as the
amalgamation of the sites will be phased in over the next nine
months, thereby ensuring full continuity of supply to the
division's customers.
Sales in the Ceramics division in the third quarter of GBP176
million rose by 4% over the same quarter last year and operating
profit improved by 16%. Steel production in the division's two
major markets, USA and Europe, rose by 5% and 1% respectively
over the same quarter last year. In the USA, the improvement in
production levels that became evident in the first quarter of
this year has been sustained and sales and profitability improved
as a consequence. The European steel markets were generally less
robust with weakness in the UK and Germany offset by gains
elsewhere in the region. Steel output in Asia-Pacific remained
strong and the division's activities in this region benefited
accordingly. In the remaining sectors - Glass, Foundry and
Industrial Products - market conditions were stable and
performance was sound.
The Jewelry Products sector of the Precious Metals division,
which contributes some 80% of the division's sales, saw third
quarter sales of GBP79 million, down 4% on the previous year. The
jewelry trade began to build inventory for the seasonally
stronger holiday period during the third quarter and, despite
offtake in Europe being down on last year, demand strengthened in
the USA and profits for the sector were in line with last year.
For the Precision Products sector, which is in the process of
being disposed, sales of GBP17 million were marginally higher
than last year despite tough market conditions. For the division
as a whole, operating profit increased 7% over the same quarter
last year.
The Company completed its rights issue on 29 August, raising a
net GBP277 million which was used to repay borrowings under the
syndicated bank facility. The Group's annual interest costs will
reduce by some GBP17 million as a result of the reduction in
debt. During the third quarter, operating cash outflow was some
GBP30 million which is both in line with expectations and normal
for this time of the year as working capital begins to build for
the seasonally stronger fourth quarter.
The outlook for the remainder of the year is that underlying
trading conditions are expected to remain essentially unchanged
from those experienced in the latter part of the third quarter.
As a consequence, the Company expects operating profit for the
year to be within the range of market expectations.
Note: All financial information is unaudited. All financial
comparisons are at constant exchange rates. This announcement
contains forward-looking statements about Cookson. Although the
Company believes its expectations are based on reasonable
assumptions, any such statements may be influenced by factors
that could cause actual outcomes and results to be materially
different from those predicted. These forward looking statements
are subject to numerous risks and uncertainties that could cause
actual results to differ materially from those in such
statements, certain of which are beyond the control of Cookson.
CONTACT: Shareholder/analyst enquiries:
Stephen Howard, Group Chief Executive
Phone: 020 7766 4500
Dennis Millard, Group Finance Director
Phone: 020 7766 4500
Lisa Williams, IR Manager
Phone: 020 7766 4500
COLT TELECOM: Meeting Highberry Over Petition for Administrator
---------------------------------------------------------------
Colt Telecom Group and Highberry Ltd. are scheduled to meet for a
three-day hearing next month in Britain's High Court. The
tentative schedule is between December 2 and the Christmas
holiday season.
Highberry, part of The Elliott Group, earlier presented a
petition to the High Court for the appointment of an
administrator to COLT after losing faith in Colt's balance sheet
and forecasts.
Colt Telecom responded to the motion in a statement saying there
is no basis for the US-based hedge fund's action. The British
company assured it will be able to refinance bonds that mature
between 2005 and 2009.
Highberry, a New York based Hedge Fund, has informed COLT that it
holds senior notes and senior convertible notes issued by COLT.
According to Reuters, analysts do not believe the petition for
administration will succeed, as the bonds in question are not due
for another three years.
MARCONI PLC: Completes Supply of DWDM Systems To Vodafone
---------------------------------------------------------
Marconi (MONI) announced that it has successfully completed the
delivery of over 300 DWDM optical systems to Vodafone Omnitel to
meet the availability requirements and the capacity demands of
the broadband mobile 3G network. The agreement to supply the
optical network equipment was announced in January 2002.
Marconi's technology will enable Vodafone Omnitel to light up
almost 12,000 km of fibre-based infrastructure, connecting all
major Italian cities. The agreement will combine the granularity
of SDH technology with the broadband volume capacity of DWDM, and
also enable a significant reduction in the operational costs of
Vodafone Omnitel's broadband mobile network.
Giorgio Bertolina, Executive Chairman of Marconi Communications
S.p.A. said: "In the current economic climate, it is more
important than ever to ensure our customers can capitalize on
their existing investment and infrastructure. Our technology has
been specifically designed to allow this and the Vodafone Omnitel
project is a clear demonstration of this strategy in action."
Today's announcement covers the delivery of over 300 DWDM Marconi
systems including Photonics Line Terminals (PLTs), Photonics Line
Amplifiers (PLAs) and Photonics Line Add/Drop (PLDs).
The DWDM layer can support 2.5Gb/s and 10Gb/s signals enabling
Vodafone Omnitel to meet the growing demand for high bandwidth
data traffic. Additionally it positions the company strongly in
the Italian market to meet the demands that will come from the
introduction of 3G services, allowing Vodafone Omnitel to
dynamically upgrade its existing network to a maximum capacity of
80 channels for 10Gbit/s.
Under the comprehensive agreement between Marconi and Vodafone
Omnitel, announced in January this year, Marconi will provide the
company with an integrated range of SDH ring terminals, a DWDM
line system, optical cross connects, integrated network
management, installation and training, together with network
maintenance and 24/7 technical support.
Notes to Editors
The PLx family
The PLx family is a flexible, fully managed DWDM line system with
add/drop capability that satisfies the demands of long-haul
network requirements, enabling operators to respond to changing
traffic patterns.
The PLx family supports up to 800 GHz capacity, incorporates
multirate transponder for transport capability of standard
SDH/Sonet and Gigabit Ethernet protocols and provide a first
class integrated SDH solution to increase network flexibility.
The system performs to a high standard thanks to advanced
features such as hybrid EDFA and Raman amplification, OOB-FEC
both on 2.5GB/s as on 10Gb/s, and a 4x2.5 Gbit/s TDM multiplexer,
granting comprehensive protection options and complete Quality of
Service. Exploiting L-Band technology, the PLx also provides high
transmission capacity over DSF fiber, adding value to previous
infrastructure investments.
Customer ownership is optimized by automatic and remote link
control, while the system's modular architecture enables
scalability to meet increased traffic demand, offering the
benefits of future technology advances.
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 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: HG Capital To Lead Bid for Several Divisions
------------------------------------------------------
Investment firm HG Capital is believed as the front-runner to
acquire several divisions of holiday group MyTravel, the no.2
operator in UK behind Thomson Travel.
The company is understood to have eyed the group's Leger, Cresta,
Bridge and Panorama specialist travel operations. HG is said to
be willing to offer GBP150 million for the assets.
Harry Coe, former managing director of MyTravel, who was reported
particularly interested in MyTravel's Scandinavian businesses,
admitted being approached by venture capitalists to lead a
takeover of some of the group's division. Mr. Coe, however, is
not seen as interested in embarking on a major role.
MyTravel offers travel and tour services from about 1,000 travel
outlets in Europe, North America, and the UK under more than 80
brands such as FTi, Spies, Sunquest, Suntrips, and Tradewinds.
MyTravel also owns four airlines, four cruise ships, and some 130
hotels.
The company is recently 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
PEARL ASSURANCE: Moody's Lowers Long-Term Fund Rating
-----------------------------------------------------
Moody's downgraded the long-term fund rating of Pearl Assurance
Plc, to A3 from Aa3. The action is in conjunction with the
downgrade of the ratings by two notches of Pearl's parent, AMP
Group.
Moody's downgraded the senior debt ratings of the AMP Group
(senior to A3 from A1, subordinated to Baa1 from A2), and
downgraded commercial paper issued by various group entities and
guaranteed by AMP Group Holdings to P-2 from P-1. The insurance
financial strength rating of National Provident Life was also
lowered to A3 from A1.
The rating agency attributed the downgrade to the impact of the
weakening financial profiles at the UK insurance operations of
the group. It noted in particular that AMP's support to its
subsidiary reduced the overall credit quality of the group.
AMP UK was hit by heavy and sustained falls in the equity markets
in the last 18 months aside from the gradual erosion of capital
at Pearl Assurance, its main UK operating entity.
Moody's believes that: "the capital weaknesses in the UK
operations have, in combination with reduced earnings levels, led
to a deterioration in the Group's financial profile." The
weakness in the UK operations had weighed down the company's
strong performance in its Canadian operations.
The following ratings were downgraded
AMP Life Ltd Insurance financial strength to Aa3 from Aa2
Pearl Assurance Plc long-term fund Insurance financial strength
to A3 from Aa3
National Provident Life Insurance financial strength to A3 from
A1
AMP Group Finance Services Ltd Senior debt to A3 from A1
Subordinated debt to Baa1 from A2
Commercial paper to P-2 from P-1
AMP Group Holdings Ltd Senior debt to A3 from A1
AMP (UK) Finance Services Plc Senior debt to A3 from A1
Commercial paper to P-2 from P-1
NPI Finance plc Subordinated debt to Baa2 from A3
AMP Henderson Global Investors Ltd Preferred stock to Baa2 from
A3.
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.
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
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or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
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