/raid1/www/Hosts/bankrupt/TCREUR_Public/021121.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 21, 2002, Vol. 3, No. 231


                              Headlines


* A U S T R I A *

HEAD HOLDING: Moody's Affirms Ratings, Changes Outlook

* F R A N C E *

ALCATEL: AB Lietuvos Deploys Optical SDH Transport Systems
VIVENDI UNIVERSAL: SEC Turns Inquiry Into Formal Investigation

* G E R M A N Y *

ALLIANZ AG: Moody's Changes Outlook From Stable to Negative
BABCOCK BORSIG: Sells U.S. Unit to Hudson Investment Group
BABCOCK BORSIG: FISIA Is New Shareholder of Powersystems

* I T A L Y *

CIRIO: Defaults on Around EUR1 Billion Worth of Bonds

* N E T H E R L A N D S *

PETROPLUS FUNDING: Moody's Places Implied Ratings on Review

* P O L A N D *

BANKO PEKAO: Fitch Affirms Ratings for Poland's Bank Pekao BW

* S P A I N *

CAJA DE AHORROS: Fitch Lowers Individual Rating to 'C' From 'B/C'

* S W I T Z E R L A N D *

ZURICH FINANCIAL: Discloses Shareholdng of Brandes Investment

* U N I T E D   K I N G D O M *

ABERDEEN ASSET: Trouble Looms Over Ties With Equitable Life
AES DRAX: Fitch Comments on Termination of TXU Hedge Agreement
AMEY PLC: Appoints Laing Investment as Preferred Bidder
AMP LTD.: Standard & Poor's Places Outlook on CreditWatch
ANTISOMA PLC: Provides New Details on Roche Agreement
AQUILA INC.: Responds to Standard & Poor's Downgrade
BALTIMORE TECHNOLOGIES: Proposes New Employee Share Scheme
BRITISH ENERGY: BNFL Offers to Renegotiate Reprocessing Contract
COLT TELECOM: S&P Lowers Long-Term Corporate Credit Rating
NTL INC.: Vodafone Files Overcharging Complaint to High Court
PIZZAEXPRESS: Osmond Wants to See Books to Finalize Bid
TXU EUROPE: Fitch Drops Rating to 'D', Predicts Lenders Recovery
TXU EUROPE: Succumbs Into Receivership After AES Cut Ties


=============
A U S T R I A
=============


HEAD HOLDING: Moody's Affirms Ratings, Changes Outlook
------------------------------------------------------
Moody's Investors Service affirmed the ratings of Head Holding
GmbH, while changing the outlook from stable to negative.  

The action follows the company's announcement of its third
quarter results.

Ratings affirmed are:

the Ba2 senior implied rating
the B1 senior unsecured issuer rating
the B1 senior unsecured debt rating of the senior notes

Moody's notes that difficult conditions in the market continue to
affect the sporting goods manufacturer.  Factors cited to
influence the market status include sluggish consumer spending,
reductions in vacation travel affecting diving and overall
declining tennis rackets markets.

Head's debt protection measurements are considered adequate for
its rating category, but its financial structure poses concern.  
The rating agency warns of a possible weakening in the company's
structure in case operating performance deteriorate.

Moody's considers Head's financial flexibility to be within its
rating category, and expects EBITDA/net interest expense coverage
ratio to be consistent with the Ba2 category for senior implied
rating.

The outlook also factors in possible debt-financed acquisitions
or additional share buy-backs.

In Moody's assessment, Head is unlikely to obtain fresh equity
injection from shareholders due to the recent disappointing share
price performance.  Share buy-back meanwhile, if in case it
happens, is expected to remain minimal.


===========
F R A N C E
===========


ALCATEL: AB Lietuvos Deploys Optical SDH Transport Systems
----------------------------------------------------------
Alcatel (Paris: CGEP.PA and NYSE: ALA), the world leader in
optical networking, and AB Lietuvos Telekomas, Lithuania's
largest provider of telecommunication services, announced the
successful completion of the first phase of an expansion project
covering the deployment of new data-aware metropolitan rings in
Lithuania. Leveraging Alcatel's new generation synchronous
digital hierarchy (SDH) technology, the project will enhance the
capacity of AB Lietuvos Telekomas' existing network
infrastructure. This implementation will allow AB Lietuvos
Telekomas to meet Lithuanian business and residential users'
growing requirements for broadband services, such as Fast
Ethernet and business application services, as well as to
efficiently support asymmetric digital subscriber line (ADSL)
traffic.

The three-year frame agreement, signed in July 2002, calls for
the implementation of Alcatel's world class Optical Multi-Service
Node (OMSN) systems that are designed to address the transmission
needs of both regional and metropolitan applications. Under the
first phase, Alcatel has built up an SDH metro ring already
carrying services in Vilnius, the country's capital. To provide
interconnection with the existing national infrastructure,
Alcatel will also supply its SDH multi-service cross connect, the
Alcatel 1641 SX, that allows network capacity upgrades without
any traffic interruption in metropolitan environments.

Their combined implementation will provide AB Lietuvos Telkomas
with a 2.5Gbit/s scalable transmission solution offering advanced
optical networking features in terms of network capacity and
protection. Furthermore, Alcatel will supply its integrated end-
to-end network management solution to provide efficient control
of the new rings, while imparting significant economics in
operating the network.

"Alcatel's technology and feature-rich systems will give AB
Lietuvos Telekomas access to a best-of-class and cost-effective
transport platform," said Tapio Paarma, CEO and general manager
of AB Lietuvos Telekomas. "This implementation will enable us to
make a quality leap in our network's flexible expansion in
response to future demands."

"We are very pleased that AB Lietuvos Telekomas has leaned on our
world-class technological expertise to deliver to its customers
new broadband communications benefits," stated Jean-Marie
Vansteenkiste, president of Alcatel's optical networks
activities. "This project extends our long-lasting and successful
cooperation with AB Lietuvos Telekomas "

Alcatel's relationship with AB Lietuvos further strengthens
Alcatel's position in Central and Eastern Europe, which builds on
the successful deployment of backbone and metro transport
networks for major operators and utility companies.

About AB Lietuvos Telekomas
AB Lietuvos Telekomas is the largest telecommunications service
company in Lithuania. Main areas of the Company's activity
include fixed telephony services, network and data communication
services, Internet-related services, provision of wholesale
services to other telecommunications operators and service
providers as well as sales and maintenance of telecommunications
equipment. More information about AB Lietuvos Telekomas is
available on the web page: http://www.telecom.lt.

About Alcatel's Optical Multi-Service Nodes (OMSN)
Designed for both metro and core applications, Alcatel's Optical
Multi-Service Nodes provide world-class next-generation SDH
functionality and capacity through aggregation of broadband
multi-protocol traffic patterns. Their deployment allows
operators of optical transport networks to achieve the optimal
balance between new competitive service offerings and traditional
revenue-generating services by introducing a wide variety of data
managed services - including top-level differentiated QoS
capabilities, variable service rates and traffic congestion
management. Supporting STM-4c, STM-16c and STM-64c concatenated
payloads, OMSNs deliver integrated ATM and Packet Ring/MPLS
switching, as well as LAN interfaces (Ethernet, Fast Ethernet and
Gigabit Ethernet) by integrating ISA plug-in modules. Although
configurable as ADMs (Add-Drop-Multiplexers), OMSNs have full
cross-connect capability thanks to their symmetrical and scalable
architecture. OMSNs are flexible for use in all network
topologies - i.e.: point-to-point, linear chains, multiple rings,
meshed networks - and ensure complete synergistic use of hardware
items across the systems, from common parts to traffic ports.
Additionally, they all have fully non-blocking SDH matrices
(HO/LO) and support all standard PDH interfaces.

About Alcatel 1641 SX
The Alcatel 1641 SX multi-service metro gateway is a synchronous
cross connect that lets operators add features and increase
capacity under live traffic. The system performs cross
connections between all types of PDH and SDH ports, helping
provide the highest flexibility and performance for present and
future network requirements. It offers a full range of SDH/SONET
functionality, including multiplexing, grooming and segregation,
protection and performance monitoring.

About Alcatel
According to leading telecom market research firm RHK, Alcatel
was the 2001 world leader in global optical transport -
encompassing terrestrial and submarine applications - with 17%
market share, in terrestrial optical transport with 14.2% market
share and in submarine optical transport with 41% market share,
an unprecedented achievement in the telecom industry. Alcatel's
optics business comprises optical components, optical fibers,
SDH/SONET and DWDM systems, cross-connects, microwave radio
links, network intelligence, and services for both terrestrial
and submarine applications.

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.


VIVENDI UNIVERSAL: SEC Turns Inquiry Into Formal Investigation
--------------------------------------------------------------
The Securities and Exchange Commission has turned its informal
inquiry of Vivendi Universal into a formal investigation.

In a statement, the French and media group confirmed the
regulator's advice of the move and indicated its intention to
cooperate fully with the probe.  

The progression of the inquiry to a formal proceeding means the
regulatory body will subpoena third parties, such as the
company's accountants and law firms.

According to the Financial Times, the inquiry is expected to
touch on Vivendi's financial statements disclosure procedure and
the accounts themselves.  The SEC did not reveal details of the
investigation, however.

The formal investigation will proceed in conjunction with the
ongoing investigation being conducted by the Office of the United
States Attorney for the Southern District of New York.


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G E R M A N Y
=============


ALLIANZ AG: Moody's Changes Outlook From Stable to Negative
-----------------------------------------------------------
Moody's Investors Service changed the outlook of Allianz Group's
ratings from stable to negative based on the company's poor
third-quarter operating results.

The rating agency said the results reflect previously announced
needs to increase provisions for:

(i) A&E claims in the United States;

(ii) the losses relating to European floods

(iii) the continued losses at the Allianz subsidiary, Dresdner
Bank; and

(iv) the substantial impact of market-related asset write-downs.

The third quarter yielded EUR2 billion in losses, an amount far
larger than the year-to-date loss of EUR0.9 billion.

Moody's notes that these factors offset improvements in some
operating businesses. According to the rating agency, the outlook
was changed to negative from stable to reflect not only the
group's weakened earnings and capital position, but also to
express the agency's belief that current market difficulties may
continue in the short-to medium-term and affect Allianz overall
earning situation.

Outlooks on the following ratings were changed to negative from
stable

INSURANCE FINANCIAL STRENGTH RATINGS

AGF Vie: Aa2 IFSR

AGF IART: Aa2 IFSR

Allianz Elementar Versicherungs-AG: Aa3 IFSR

Allianz Elementar Lebensversicherungs-AG: Aa3 IFSR

Allianz Lebensversicherungs-AG: Aa1 IFSR

Allianz Life Insurance Co of North America: A1 IFSR

Allianz Suisse Lebensversicherungs-Gesellschaft: Aa3 IFSR

Allianz Suisse Versicherungs-Gesellschaft: Aa3 IFSR

Cornhill Insurance plc : A1 IFSR

Fireman's Fund Insurance Company (and associated entities): A1
IFSR

Hermes Kreditversicherungs-AG: Aa3 IFSR and P-1 short-term IFSR

LifeUSA Insurance Company : A1 IFSR

Lloyd Adriatico SpA: Aa3 IFSR

Riunione Adriatica di Sicurta SpA: Aa2 IFSR


DEBT RATINGS

Allianz AG: P-1 Commercial Paper

Allianz Finance BV: Aa2 senior debt

Allians International Finance NV: Aa2 senior debt

Allianz Finance II BV : Aa2 senior debt and A1 subordinated debt

Allianz Finance Corporation: P-1 Commercial Paper

BANK RATINGS

Dresdner Bank AG: Aa3 long-term senior debts and deposits, A1
subordinated debt, P-1 short-term deposits and the C bank
financial strength rating.

Dresdner Bank AG, New York branch: A1 subordinated debt

Dresdner Finance BV: Aa3 long-term senior debts and P-1 short-
term debts

Dresdner US Finance Inc: P-1 Commercial Paper

Kleinwort Benson Limited: A1 long-term deposits, P-1 short-term
deposits and the
C bank financial strength rating.

Dresdner International Finance Plc: Aa3 long-term senior debts

Dresdner Bank Luxembourg SA: A1 long-term senior debts and
deposits, A2 subordinated debt, P-1 short-term deposits and the
C+ bank financial strength rating.

Dresdner Bank (Ireland) Plc: A1 long-term deposits, P-1 short-
term debts and deposits and the C- bank financial strength
rating.

Dresdner Bank Funding Trust I, II, II and IV: A2 preferred stock.


BABCOCK BORSIG: Sells U.S. Unit to Hudson Investment Group
----------------------------------------------------------
Insolvent company Babcock Borsig sold its U.S. unit, Babcock
Borsig Capital Corp, to private-equity investor Hudson Investment
Group for an undisclosed price, AFX reports.

The deal, which is expected to close by the start of December,
provides that BBCC will drop its demand for debt payments from
Babcock Borsig.  

Meanwhile, the engineering group's former board of directors and
the supervisory board may possibly face legal action on delaying
insolvency proceedings. The Dusseldorf department of public
prosecution had lodged the accusations against the former
management.

According to Die Welt, the former management board of the group
was already aware of the financial plight of the company as early
as in the spring of 2002.  In March of 2002, Babcock had already
accumulated debts of EUR525 million.


BABCOCK BORSIG: FISIA Is New Shareholder of Powersystems
--------------------------------------------------------
FISIA Italimpianti S.p.A. is the first investor for Babcock
Borsig PowerSystems GmbH, which was established at the beginning
of October with around 2,600 employees as the rescue company of
Babcock Borsig AG. The company concentrates on the core
activities of technical service, power engineering and
environmental engineering.

FISIA, which is being counseled by Dr. Eckart Petzold (Lovells
society), has initially taken on 5% from Babcock Borsig AG in
Babcock Borsig PowerSystems, with an option on a further 19.9 %.

Horst Piepenburg, chief executive of Babcock Borsig AG and
chairman of the board of directors of Babcock Borsig PowerSystems
GmbH, said: "This partnership strengthens Babcock Borsig
PowerSystems and the environmental engineering division will
largely benefit from this concept. We are now better positioned
on the markets. In addition, Babcock Borsig PowerSystems has the
chance of now completing the projects it has started and of
obtaining enhanced earnings."

As a result, the environmental engineering operating field of the
rescue company will be set up anew. Environmental engineering
will in future be doing business under "FISIA Babcock Environment
GmbH". FISIA and Babcock Borsig PowerSystems are the shareholders
of FISIA Babcock Environment. This company is equipped with an
advisory council for approving all the main business
transactions.

This strategic partnership will allow the total financial needs
of rescue company Babcock Borsig PowerSystems, in which the core
businesses of Babcock Borsig AG are continued, to be lowered from
the planned EUR 360 million to EUR 287.5 million. There will be
no change to employee numbers of 2,600 at Babcock Borsig
PowerSystems.

Dr. Helmut Schmitz, the creditors' trustee of Babcock Borsig AG
and 18 other Babcock companies, said at the end of the
constructive negotiations over the past few weeks: "This
agreement is further testimony to the fact that the rescue
company has started off with a promising concept. We kept the
creditors' committee informed on our negotiations at all times
and reached agreement on the approach to adopt at the last
meeting."

FISIA Italimpianti S.p.A. of Italy specializes in planning,
designing and constructing complete waste-to-energy plants,
water/waste water conditioning facilities and desalinization
plants for sea water. Fisia was the leader of an international
consortium comprising Impreglio of Italy and Babcock Borsig for
three waste-to-energy facilities in the Italian region of
Campania.

FISIA posted revenues of over EUR 378 million and employed 350 in
2001. It is a 99% subsidiary of Gruppo Impregilo S.p.A., the
Milan building group, which is principally active in civil &
underground engineering, infrastructure projects, major
constructional engineering projects, operator models and
management services. Impregilo is also the operator of Rome
airport.

Roberto Gambato, executive manager of Impregilo S.p.A, said:
"Acquisition of the stake and the majority take-over of
environmental engineering in the former Babcock Borsig Group is
confirmation of Impregilo's growth strategy in environmental
engineering, where the focus is on thermal waste conditioning and
flue gas cleaning. Impregilo also expects substantial synergies
to arise from the connection with one of the leading power
engineering suppliers. In this way, FISIA Babcock has created an
excellent position at the outset for assuming market leadership
among its international competitors.

Horst Piepenburg looks upon the well-anchored partnership from
the capital and business sides as "recognition that in
international business the rescue company will be able to play
out its technical service competence and market presence."  


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I T A L Y
=========


CIRIO: Defaults on Around EUR1 Billion Worth of Bonds
-----------------------------------------------------
Italian food group Cirio defaulted on bonds worth around EUR1
billion Tuesday, making it the first-ever Italian corporate bond
issuer in default according to popular opinion, says Reuters.

An official at the Law Debenture Trust Corporation in London,
which acts as trustee on behalf of Cirio's bondholders, confirmed
they had "declared a cross-default."  The trustee, however, had
not yet pressured Cirio to pay the principal and accrued interest
immediately.

According to Traders, 90% of Cirio bonds are owned by retail
investors. Italian bank Capitalia confirmed it holds EUR25
million bonds, aside from nearly EUR150 million in loans.

The report also mentioned banking sources saying the private
investors who hold about 90 percent of Cirio bonds could force an
early repayment if they managed to group together at least 20 %
of bondholders.

A group of private bondholders, meanwhile, has warned to file a
suit against banks, which helped Cirio issue bonds, says a
consumer rights association.

Other sources say the company's advisers, Livolsi & Partners,
requested for a bridge loan to some banks.  Officials from the
company, however, were not immediately reached for confirmation.

One banking source quoted by the report predicted "a lot of
problems with its interlocutors" regarding a possible asset
sales.  Cirio is currently raising cash by selling assets
including top Italian soccer team Lazio.  The group is also
considering selling stakes in Brazilian cleaning products and
food company Bombril and Singapore-based Del Monte Pacific Ltd.

Cirio has operations in Brazil, Portugal and Greece.


=====================
N E T H E R L A N D S
=====================


PETROPLUS FUNDING: Moody's Places Implied Ratings on Review
-----------------------------------------------------------
Moody's placed Petroplus's B1 senior unsecured and Ba3 senior
implied ratings on review for possible downgrade on warnings of
fractional improvement on the company's results for the second
quarter of the year.

The result is expected to fall below Moody's expectations, which
means an increase pressure in the company's "already somewhat
strained" financial profile.

On May 30, the rating agency already changed the outlook of
Petroplus International's wholly-owned financing vehicle from
stable to negative due to significantly and persistently lower
than anticipated European refining margins in 2002.

Petroplus International NV, headquartered in Rotterdam,
Netherlands, is an independent midstream oil company specialising
in refining, storage and marketing in the European oil market.

The company's position resulted in a severe deterioration in the
cash flow strength of the company during the period.

While noting improvements in industrial refining margin
benchmarks, Moody's proceeded to express doubts about a medium
term sustained improvement in refining margins, and indicated to
focus the review on future anticipated refining margins.


===========
P O L A N D
===========


BANKO PEKAO: Fitch Affirms Ratings for Poland's Bank Pekao BW
-------------------------------------------------------------
Fitch Ratings, the international rating agency, has affirmed the
ratings assigned to Bank Pekao (Pekao) at long-term 'BBB+',
short-term 'F2', individual 'C/D' and support of '2'. The long-
term Outlook is Stable.

Pekao is the largest bank in Poland by equity (and the second
largest in Central and Eastern Europe), operating the second
largest national branch network in the country. Apart from its
strong market position and franchise, its ratings also reflect
the business and management benefits it gains from being part of
the UniCredito Italiano group.

Pekao's profitability deteriorated in 2002 because of high loan
loss provisions stemming from a worsening of its loan portfolio.
Like most other banks in Poland, a negative macro economic
situation, exacerbated by the bankruptcy of the shipyard in
Szczecin, has increased the level of "lost" loans and loan loss
reserve coverage has been increased accordingly. In Pekao's case,
the level of lost loans has reached 11% of total loans (from 5.3%
at end-2001. Reserve coverage of lost loans was 72% at end-
September 2002, higher than average in Poland but still weak when
compared internationally. Total irregular loans rose to account
for almost 20% of total loans at the end of the third quarter of
2002, and were 54% covered by reserves.

On the other hand, Pekao's franchise, has allowed revenue
generation to remain strong and its cost cutting programme has
been successful. As a result it has been able to report
increasing operating profitability. Efficiency is expected to
improve further when a centralised IT system is rolled out
(expected at end-2003).

The bank's long-term rating further benefits from the potential
support it could receive from its parent (rated 'AA-' by Fitch),
in case of need, although, given its key position in the Polish
banking system, it is considered that the Polish authorities
would also support it, ultimately.

Fitch Ratings Support and Individual Ratings for Banks:

Fitch's Individual ratings assess how a bank would be viewed if
it were entirely independent and could not rely on external
support. Its Support ratings deal with the question of whether a
bank would receive support from its owners or from the state if
it were to get into difficulty. These ratings are not debt
ratings but rather, respectively, an assessment of the intrinsic
strength of a bank and of any level of outside support that may,
or may not, be available to it.


=========
S P A I N
=========


CAJA DE AHORROS: Fitch Lowers Individual Rating to 'C' From 'B/C'
-----------------------------------------------------------------
Fitch Ratings downgraded the Individual rating of Caja de Ahorros
y Monte de Pieded de las Baleares (Sa Nostra) to 'C' from 'B/C'.   
The international rating agency also affirmed the bank's Short-
term, Long-term and Support ratings at 'F2', 'A-' (A minus) and
'4', respectively.  The Long-term rating Outlook is Stable.

The rating agency initiated the action basing on the gradual
deterioration of Caja's profitability.

Fitch notes that narrowing margins, increasing costs and
insufficient income generation, resulted to higher loan loss
provisions and sluggish equity markets for the institution.

While recognizing the management's effort to combat the problem,
Fitch warns of difficulties in achieving significant improvements
in the short term due to a tougher operating environment.  The
rating agency confirmed that Caja's net income remains
appropriate for its ratings, but indicated to review the bank's
long-term rating in case this deteriorates materially.

Fitch acknowledges as well the bank's good regional franchise,
healthy asset quality and sound capital base.

Caja de Ahorros y Monte de Pieded de las Baleares is Spain's 24th
largest savings back by total assets as of the end of 2001.  Its
operations are mainly retail deposit-taking and lending to
individuals (primarily residential mortgages) and to small and
medium-sized companies, particularly real estate developers. The
Sa Nostra group also offers other specialist services such as
life insurance and leasing.


=====================
S W I T Z E R L A N D
=====================


ZURICH FINANCIAL: Discloses Shareholdng of Brandes Investment
-------------------------------------------------------------
Pursuant to Article 20 of the Swiss Stock Exchange Law, Zurich
Financial Services received the following notice from Brandes
Investment Partners L.P.:

Brandes Investment Partners, L.P. (11988 El Camino Real, Suite
500, P.O. Box 919048, San Diego, CA 92191 - 9048, USA) holds as
of November 11, 2002 by virtue of discretionary investment
authority from its clients 8.22 % of the voting rights in Zurich
Financial Services. This is equivalent to the voting rights of
11,831,383 common shares.

Brandes holds 7'600'409 ordinary shares of Zurich Financial
Services and 42'309'740 American Depository Receipts of Zurich
Financial Services. These ADRs represent 4'230'974 ordinary
shares of Zurich Financial Services and entitle the holder to
give voting instructions through the Bank of New York, which
administrates the Zurich Financial Services ADR program. All the
said securities are beneficially owned by Brandes' clients.

Zurich Financial Services is an insurance-based financial
services provider with an international network that focuses its
activities on its key markets of North America, the United
Kingdom and Continental Europe. Founded in 1872, Zurich is
headquartered in Zurich, Switzerland. It has offices in
approximately 60 countries and employs well over 70,000 people.

CONTACT:  Zurich Financial Services, Media and Public Relations
          8022 Zurich, Switzerland
          Phone: +41 (0)1 625 21 00
          Fax: +41 (0)1 625 26 41
          Home Page: http://www.zurich.com


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U N I T E D   K I N G D O M
===========================


ABERDEEN ASSET: Trouble Looms Over Ties With Equitable Life
-----------------------------------------------------------
Aberdeen Asset Management is likely to brace itself for a blow
when troubled insurer, Equitable Life, clarifies its debt-paying
capacity.

The asset manager emerged as one of the biggest bondholders of
the insurer that warned having insufficient cash to meet regular
interest payments on debt with bondholders.

Aberdeen admitted holding a big part of the insurer's debt, but
refused to comment on the details of the holdings.  Yet,
according to Times Online, filings show Aberdeen holds 9.3% of
Equitable Life's GBP346 million outstanding debt through six of
its funds as of June 2002.

Aberdeen's GBP1.2 billion Fixed Interest Fund holds a nominal
value of GBP25 million, while the Jove Investment Trust owns
GBP750,000 (according to Bloomberg data).

The report notes that it is unclear whether Aberdeen has been a
long-term investor in the bonds.

Equitable Life's warning sent the company's shares tumbling by
about one-third.  The shares traded from 50p ahead of the
announcement.

The uncertainty of the payment to bondholders came together with
the firm's admonition of falling short of the regulatory solvency
requirements for its GBP14.5 billion with-profits fund on
December 31.


AES DRAX: Fitch Comments on Termination of TXU Hedge Agreement
--------------------------------------------------------------
Fitch Ratings notes the termination of the primary hedge
agreement (PHA) between AES Drax Power Limited and TXU Europe
Energy Trading Limited (TXUEET). Earlier Fitch had downgraded the
senior secured bonds issued by AES Drax Holdings Limited
(DrxHold) and the senior secured bank loan rating for Inpower
Limited (Inpower) to 'CCC' from 'BB'. At the same time, the
senior notes issued by AES Drax Energy Limited (DrxEn) were
downgraded to 'CC' from 'CCC' by Fitch in recognition of the
heightened uncertainty surrounding PHA. AES Drax is the owner and
operator of the 3.96GW coal fired Drax power station located near
Selby in the U.K. AES Corp, one of the world's largest power
developers based in the U.S. (currently rated 'B'/Rating Outlook
Negative by Fitch) is the ultimate parent of the group. The
ratings of Drax at this level do not rely on any benefit of
parental support. The ratings remain on Rating Watch Negative.

Fitch's ratings at the current level take account of the fact
that the senior debt service, which is due on Dec. 30, 2002 will
be met from the debt service reserve account (DSRA), although
this will largely deplete the account. A restructuring of the
Drax debt is now inevitable, as Fitch does not consider that
operating as a merchant plant in the current low wholesale
electricity market with average prices significantly below the
level in the PHA, Drax will be in a position to meet its debt
service obligations as they currently stand. Going forward, the
resolution of the Rating Watch on Drax's senior and high yield
debt will depend on the details of the restructuring eventually
agreed with the banks and bondholders and the extent to which it
takes account of the company's exposure to the current UK
wholesale energy market. Fitch expects low prices to persist at
least till 2005 when new emission limits may precipitate the
closure of aging coal-fired plant. Fitch considers that there is
little room for Drax to cut costs further without impacting
operational performance and any future resolution of the ratings
will take account of Drax's plans in respect of costs and
operating strategy.

The outcome of the high yield debt remains subject to a higher
degree of uncertainty. Interest payment of the DrEn Notes is due
on Feb. 28, 2003. The DSRA for the DrEn Notes was topped by AES
Corp (AES) in August with GBP15 million from the GBP7 million
balance to facilitate the payment of the interest on the notes.
At this time the DrEn DSRA is fully depleted. Given the current
situation, we expect that cash will remain trapped at the DrxHold
level precluding any payment of the high yield interest without
external support at this time. AES (recently downgraded to 'B'
from 'BB-' by Fitch) has given no assurances that the high yield
interest will be paid in 2003. So far Fitch has not been informed
of any restructuring of the high yield debt. High yield debt is
subject to a 90-day standstill in the event of non-payment of
interest giving Drax at least till May 2003 at the latest to
finalise plans for the future of this class of debt.

Following the termination of the PHA, Drax submitted on Nov. 18,
2003 a claim for capacity damages of GBP267 million to TXUEET and
TXU Europe Group plc (TEG) as the guarantor of TXUEET. This
amount is due and payable by TEG within three business days.
Other monies claimed from TXUEET include GBP42 million due on
Nov. 14 in respect of power delivered in October, as well as
GBP30 million in respect of power delivered during November. The
above amounts are all quoted excluding VAT. In the event that
Drax receives this payment either via a direct settlement from
TEG or under a liquidation scenario following a successful award
by a court, Fitch expects that the amounts together with any
other cash will be available for application towards prepayment
of senior debt. In Fitch's view Drax's claim benefits from
structural preferment over other creditors given the guarantee of
TXUEET's obligations by TEG, the recipient of the GBP1.4 billion
sale proceeds following the recent sale of TEG's retail supply
business. Drax will be operating as a fully merchant plant after
the termination of the PHA. Drax currently has available a letter
of credit facility backing its trade obligations.

Following further discussions with Drax and a review of the
company's revised forecasts, operating strategy and debt
restructuring plans, Fitch will be producing an update on these
ratings. Drax power station remains a key component of the UK
generation system representing c. 8% of generating capacity
(23TWh per annum).


AMEY PLC: Appoints Laing Investment as Preferred Bidder
-------------------------------------------------------
The Board of Amey plc announces that it has granted on Tuesday
sole Preferred Bidder status to Laing Investments Limited in
relation to a strategic partnership focused on the Group's PFI
activities.

The partnership is expected to embrace the development of Amey's
existing and future PFI activities and the disposal to Laing
Investment Limited of Amey's interest in its existing portfolio
of PFI investments.

The partnership arrangements are not intended to include Amey's
interest in the London Underground PPP or any service contracts
related to its PFI investments.

A further announcement will be made in due course.

CONTACT:  Anthony Cardew          
          Cardew Chancery              
          Phone: 020 7930 0777


AMP LTD.: Standard & Poor's Places Outlook on CreditWatch
---------------------------------------------------------
Standard & Poor's Ratings Services placed its insurer financial
strength and counterparty credit ratings on AMP Life Ltd. (rated
'AA-'), AMP Group Holdings Ltd. (rated 'A'), AMP Bank Ltd. (rated
'A'), NPI Ltd. (rated 'A+'), and related issues on CreditWatch
with negative implications.

The action follows the announcement of parent company AMP Ltd.
that it will possibly undertake substantial asset write-downs
totaling AU$1.2 billion relating to the eroded value of its
British and international operations.  AMP warns of further
restructuring costs to follow the write-downs.

Standard & Poor's indicated to review the extent to which the
group's medium-term earnings prospects and capitalization remain
congruent with existing ratings.

Meanwhile, according to S&P, the rating for NPI Ltd. reflects the
agency's view that NPI remained strategically important but no
longer a core business to the group.  

S&P hopes to resolve the group's CreditWatch status in early
December.


ANTISOMA PLC: Provides New Details on Roche Agreement
----------------------------------------------------
The following additional details are provided on Monday's
announcement by Roche and Antisoma of a strategic alliance to
develop cancer drugs:

-  Roche will buy 20.73 million new ordinary Antisoma shares at a
price of 20p per share for a total consideration of GBP4.15
million.

-  Antisoma will receive a total of US$37 million as an upfront
payment on completion of the various agreements included in the
deal.

-  For Pemtumomab, Roche will take over the development of the
product for ovarian cancer and any additional indications. Roche
will fund the entire programme.

-  For Therex, Roche will take over the development of the
product for breast cancer and any additional indications. Roche
will fund the entire programme.

-  For other products, Antisoma will fund all preclinical
development and Roche will fund development from phase III
onwards. In phases I and II it is expected that Antisoma will
fund the programmes but there are mechanisms for shared funding
at these stages.

-  There is an access payment when a product enters human
clinical studies for those products for which Roche wishes to
maintain rights. Milestones are payable at the start of phase III
and on launch. Royalties for all products will be in the double
digit range, depending on annual sales levels and the relative
contribution to phase I/II funding by Roche and Antisoma.

-  Antisoma has four products in clinical development. There are
six pre-clinical products in the published chart in the Company's
latest annual report and approximately six products at an earlier
stage to which Antisoma already has rights. Antisoma has
historically in-licensed approximately one new product per year.
It is conceivable therefore that this agreement could cover 21
products with milestones of about $50 m each. However we have
scoped the size of the deal by including 10 products at $50m,
scoping the deal at $500m excluding royalties.

-  Where Roche does not take an interest in a product, there will
be no restrictions to Antisoma's rights to develop the product
and seek partners for commercialisation. Antisoma intends, for
example, to pursue the development of AngioMab, which is not
included in the deal.

-  Certain conditions apply. The transaction may be subject to
review by the Federal Trade Commission under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976. The collaboration on
Pemtumomab is also subject to the termination of Antisoma's prior
agreement with Abbott Laboratories.  Antisoma has exercised its
right to end this agreement and today issued a notice of
termination to Abbott.

Either Antisoma or Roche may terminate the collaboration in whole
or in part if the above conditions have not been satisfied by
April 30, 2003.  

-  Roche has agreed to maintain its equity stake in Antisoma
until at least the earliest of the following: the approval for
marketing of Pemtumomab, the termination of the agreement, or the
elapse of 3 years from completion of the agreement.

CONTACT:  Antisoma plc
          Glyn Edwards, Chief Executive Officer
          Phone: +44 (0)20 8799 8200
   
          Financial Dynamics
          Jonathan Birt
          Phone: +44 (0)20 7831 3113
          Mobile: +44 (0)7884 238952


AQUILA INC.: Responds to Standard & Poor's Downgrade
----------------------------------------------------
Aquila, Inc. (NYSE:ILA) announced that its liquidity is
sufficient to meet the cash needs resulting from the downgrade
today by Standard & Poor's Corporation without affecting the
company's operations.

S&P lowered the company's credit rating to BB with a negative
outlook. It previously had rated Aquila BBB-, its lowest
investment-grade rating. Aquila said that the downgrade
potentially triggers approximately $238 million in additional
demands for cash.

"We're sorry to lose our investment-grade rating," said Richard
C. Green, Jr., Aquila's chairman, president and chief executive
officer, "but we remain well prepared to meet any additional cash
requirements that may result."

Green said that $84 million in four series of Australian
denominated bonds guaranteed by Aquila have provisions that could
require the company to repurchase the bonds if the bondholders
choose to exercise that option in the next 30 to 60 days. Aquila
also has a tolling agreement that could require it to post $37
million in additional collateral within 70 days to eight months
of Standard & Poor's downgrade. Tolling agreements allow Aquila
to generate power at plants owned by others in exchange for the
natural gas that fuels the plants. Another approximately $23
million would need to be posted to cover standard margining
agreements remaining from Aquila's discontinued wholesale energy
merchant business. There is also the potential that Aquila may be
required to post additional collateral of up to $94 million
related to certain commodity contracts.

In an effort to improve its balance sheet and credit ratings, in
this year's second quarter Aquila targeted the sale of
approximately $1 billion in non-strategic assets. To date, the
company has closed asset sale transactions totaling $796.6
million. Another sale for $180 million is pending, and Aquila is
also in the process of taking bids for its 79.9 percent interest
in Midlands Electricity, a utility in the United Kingdom.

Based in Kansas City, Missouri, Aquila operates electricity and
natural gas distribution networks serving customers in seven
states and in Canada, the United Kingdom, and Australia. The
company also owns and operates power generation assets. At
September 30, 2002, Aquila had total assets of $10.7 billion.
More information is available at www.aquila.com

CONTACT:  Aquila, Inc.
          Investor Contact:
          Neala Clark
          Phone: 816/467-3562


BALTIMORE TECHNOLOGIES: Proposes New Employee Share Scheme
----------------------------------------------------------
Baltimore Technologies plc (London: BLM) announced that it has
posted a circular to its shareholders seeking approval at an
extraordinary general meeting to be held on 16 December 2002 for
a new "nil cost" employee share scheme and a 10:1 consolidation
of its ordinary shares.

Peter Morgan Chairman of Baltimore Technologies plc said:

"Baltimore already has a number of schemes based on granting
options at the prevailing market price. With the unforeseen and
dramatic change in the global equity markets, options based on a
market price no longer provide a suitable long term incentive for
employees and the proposal is to create a "nil cost" share plan
open to all existing employees".

Bijan Khezri, Chief Executive of Baltimore Technologies plc
commented:

"It is not only a fundamentally changed equity capital markets
environment that has prompted us to reconsider traditional option
schemes.  Stakeholders must question: what are the objectives and
the future of equity-based employee motivation, in particular for
a human capital-centric business such as ours? The objective
cannot be to create a lottery ticket for employees. However, this
is precisely what many traditional option schemes have become.

Our company's performance is driven by the commitment, trust and
loyalty of our employees. Real share ownership by all our
employees underpins this culture. Our proposed scheme represents
an important start, reflecting a new, refocused and long-term
oriented Baltimore Technologies, and should provide a critical
element for both strengthening our competitiveness and growing
our business in the future."

There are no proposals to increase the existing overall limit of
15% of the issued share capital for the grant of options and all
employees will be given the opportunity to exchange their current
market price based options at the rate of 2:1 for nil cost
options.

In May 2000 the Company implemented a 10:1 split in its share
capital changing the nominal value of the ordinary shares from 1p
to 0.1p. At that time prior to the split the Company's shares
traded from January 2000 to May 2000 in the range of GBP46.775 to
GBP137.50. Over the past 6 months the Company's share price has
traded in the range of 3.5p to 9p and in light of this the
Company is proposing that it reverses the May 2000 10:1 split.

About Baltimore Technologies

Baltimore Technologies' products, professional services and
solutions address the fundamental security needs of e-business.
Baltimore's e-security technology provides companies with the
necessary tools to verify the identity of transaction partners
and securely manages which resources and information users can
access on open networks.  Many of the world's leading
organisations use Baltimore's e-security technology to conduct
business more efficiently and cost effectively over the Internet
and wireless networks.

Baltimore's products and services are sold directly and through
its worldwide partner network, Baltimore TrustedWorld. Baltimore
Technologies is a public company, trading on the London Stock
Exchange (BLM). For more information on Baltimore Technologies
please visit http://www.baltimore.com

CONTACT: Edward Bridges/Alastair Hetherington
         Financial Dynamics
         Phone: +44 207 831 3113


BRITISH ENERGY: BNFL Offers to Renegotiate Reprocessing Contract
----------------------------------------------------------------
Nuclear reprocessing group BNFL has offered British Energy a deal
that could save the troubled nuclear generator GBP100 million a
year.

The renegotiation of the reprocessing contract, which would see
British Energy paying less than GBP200 million instead of GBP300
million a year, is seen as a possible bailout for the energy
firm.  The offer links the price for reprocessing to the market
price of electricity.

The offer follows the energy company's move to pay its
government-backed loan by selling all or part of its stake in
Ontario's largest independent power generator, Bruce Power LP.  

British Energy is in danger of collapsing into administration in
case it cannot present a restructuring plan before the November
29 expiration of the emergency loan.

BNFL is understood to be concerned of British Energy's survival,
being the latter's largest customer, according to Times Online.


COLT TELECOM: S&P Lowers Long-Term Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services lowered the long-term
corporate credit rating on COLT Telecom Group Plc to 'B-' from
'B+' due to persistent weak demand and falling prices in the
company's markets.  The action affects about GBP1.2 billion
(US$1.8 billion) of debt.

The U.K.-based telecommunications operator failed to improve
revenues, gross profits, and operating cash flow in line with
S&P's expectations.

According to Peter Kernan, head of Standard & Poor's European
telecoms group, "Given the relative weakness of macroeconomic
conditions in COLT's key markets and the ongoing competitive
nature of COLT's markets, Standard & Poor's considers that
revenue growth rates will continue to be depressed and, as such,
believes that it may be difficult for COLT to grow into its
capital structure."

All ratings were removed from CreditWatch, where they were placed
on Feb. 26, 2002, and assigned a stable outlook.  The action
reflects S&P's belief that COLT's reduced capital expenditures
will result in much reduced rate of cash burn and improving
profitability going forward.

S&P says the current rating level satisfies uncertainties
regarding low revenues growth and progress toward cash flow
breakeven.

The rating agency indicated that the ratings assume that
liquidity remains sufficient on a rolling basis to cover
commitments falling due within the following 18 months.
     

NTL INC.: Vodafone Files Overcharging Complaint to High Court
-------------------------------------------------------------
Mobile operator Vodafone filed a legal proceedings to the High
Court against NTL on grounds that the cable operator has been
overcharging it for line rental, the Financial Times reports.

NTL stated in a US Securities and Exchange filing that Vodafone
launched the legal proceedings to recover excess annual rent paid
for line rental used for connecting calls.

The cable operator, which is currently under Chapter 11
protection, warns that the success of Vodafone's claim could
endanger the company's financial position.

NTL Incorporated and subsidiaries is comprised of the business
and operations that are also known as NTL Europe.


PIZZAEXPRESS: Osmond Wants to See Books to Finalize Bid
-------------------------------------------------------
Hugh Osmond, the entrepreneur who launched a bid for PizzaExpress
three weeks ago, demanded to see the restaurant chain's books
before it proceeds with negotiations on a possible deal.

Mr. Osmond had launched his GBP251 million bid jointly with the
Nando's chicken chain, and is using Sun Capital Partners as
investment vehicle.  Sun Capital had announced an indicative bid
of 330 p to 350 p for the company on November 4.   

Sun Capital has refused to confirm a fully funded offer unless it
is allowed to conduct due diligence as part of a formal
negotiating process.

The entrepreneur threatened to withdraw from the talks unless the
company's advisers, Credit Suisse First Boston, satisfy his
condition, says Times Online.  According to the report, Mr.
Osmond is believed to have become frustrated at CSFB's
negotiations with other parties.

Corporate finance boutique, Hawkpoint Partners, is reportedly
orchestrating a possible counterbid, but so far, there has been
no other parties concretely challenging the bids, says the
report.

One source close to the talks told Times Online: "Unless CSFB
agree to formal talks, it looks like Osmond will walk away or, at
the very least, make an offer at the bottom end of the indicated
price range."
  
Both sides refused to comment.


TXU EUROPE: Fitch Drops Rating to 'D', Predicts Lenders Recovery
----------------------------------------------------------------
Fitch Ratings has downgraded the senior unsecured and short-term
debt ratings of TXU Europe Limited (TXE) to 'D/D' from 'C/C'. The
rating of 'D' reflects the default by subsidiaries of TXU Europe
Ltd. (TXE) upon interest payment payments and the guarantee of
interest payments. The default relates expiry of a 30-day grace
period on interest payments not met for a $200 million bond
issued by Energy Group Overseas BV and guaranteed by The Energy
Group Ltd.. Both of these entities are owned by TXU Europe Ltd.,
and default under these obligations cross-defaults to the group's
remaining capital markets debt.

The ratings also reflect today's decision by TXE to place several
of its units into temporary administration. This decision affects
TXU Europe Ltd., The Energy Group Ltd., TXU Europe Group plc, TXU
(UK) Holdings Ltd., TXU Acquisitions Ltd. and TXU Europe Energy
Trading Ltd. (TXUEET). Finally, the rating reflects the low
estimated recovery on financial indebtedness - a 'D' rating
indicates that Fitch's expectation for ultimate recovery for
financial creditors of TXU Europe Ltd. lies below 50%. The 'DD'
and 'DDD' rating categories would reflect increased expectations
of recovery of '50-90%' and '90%' respectively.

In summary, Fitch believes that:

--financial creditors at the TXU Europe Ltd. level are likely to
achieve a recovery of below 50% in aggregate;

--any financial creditors to TXU Europe Group plc (which Fitch
believes is a much smaller class) may potentially receive
recovery above this level;

--recovery for trade creditors at the TXUEET level will be a
function of the eventual extent of trade liabilities established,
and whether or not individual liabilities have the benefit of a
guarantee from TXU Europe Group plc.

TXUEET trade liabilities with no guarantee will likely achieve a
level of recovery significantly below 50%; those with a guarantee
may potentially achieve a recovery of 50% or above. The central
dilemma in current considerations revolves around the following
interplay:

Fitch believes that TXU Europe Group plc, an intermediate holding
company below TXU Europe Ltd., contains virtually all residual
value within the group, both in terms of the receipts from a
recent asset disposal (GBP1.37 billion in cash), and in terms of
the ownership of remaining valuable assets which may yet be sold
(up to GBP740 million on Fitch's estimates). Fitch understands
that TXU Europe Group plc also acts as guarantor for some of the
trading exposure of TXU Europe Energy Trading. The remaining
trading business is, at the same time, the most proximate drain
on funds and, as a result of the existence of the guarantees from
TXU Europe Group plc, the source of the greatest subordination of
existing financial creditors. The entity with greatest positive
value -- TXU Europe Group plc -- is thus heavily bound to the
entity with greatest negative value -- TXUEET.

Fitch has published a report outlining the rationale for the
above recovery expectations, which is available via
FitchResearch, the Fitch Ratings subscription-based web site
located at 'www.fitchratings.com', or by contacting Susan
Meshkati on +44 (0)20 7417 4353.


TXU EUROPE: Succumbs Into Receivership After AES Cut Ties
---------------------------------------------------------
Energy company TXU Europe went into administration after AES,
owner of Britain's biggest power station at Drax in Yorkshire,
ended a supply contract with the European unit of Dallas-based
TXU Corp.

AES ended the long-term contract to supply TXU Europe 60% of its
output following failure of the latter to pay GBP50 million for
its October bill.

The company, which has debts of more than GBP3 billion was hit by
power prices slump in the U.K.  Power prices in the region have
plunged 40% since 1998.  Late in October, the company sold most
of its British operations to E.ON AG of Germany for US$2.13
billion.  

KPMG and Ernst & Young were appointed administrators for the
energy company.


                                    ************

         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
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Information contained herein is obtained from sources believed to
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