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/raid1/www/Hosts/bankrupt/TCREUR_Public/021122.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 Friday, November 22, 2002, Vol. 3, No. 232 Headlines * F R A N C E * ALCATEL: Moody's Downgrades Senior Debt Ratings to B1 VIVENDI UNIVERSAL: Announces EUR 1 Billion Notes Offering * G E R M A N Y * ALLIANZ GROUP: A.M. Best Places Rating Under Review BAYER AG: Receives FDA Clearance for Cerebrospinal Fluid Test COMMERZBANK AG: Fitch Lowers Long-Term Rating, Revises Outlook COMMERZBANK: Fitch Ratings Lowers Residence 2000-1 Class B CLNs * N E T H E R L A N D S * GETRONICS N.V.: Standard & Poor's Revises Outlook to Negative ROYAL PHILIPS: Gives Update on a Number of Its Businesses * P O L A N D * NETIA HOLDINGS: Sets Hearing Date for Netia South Arrangement * S W E D E N * LM ERICSSON: Intec Buys 'Settler' Interconnect Billing Product * S W I T Z E R L A N D * CREDIT SUISSE: Winterthur Life Launches New Investment Bond CREDIT SUISSE: Turnaround to Entail More Job Cuts, Says Co-CEO CREDIT SUISSE: Winterthur Pensiones Launch New F100 SWISS INTERNATIONAL: Reduces Excess Planes From Fleet SWISS LIFE: Corporate Executive Board Member to Resign * U N I T E D K I N G D O M * ABBEY NATIONAL: CEO's Proposal Likely to Cost Significant Losses AORTECH INTERNATIONAL: Posts GBP7.6 Million Loss in Results AORTECH INTERNATIONAL: Wider Losses, Chairman's Exit Hit Shares MARCONI PLC: Dispute With Creditor to Postpone Debt Refinancing NTL INC.: Broadcast Increases U.K. Digital Radio Channels PIZZAEXPRESS: Osmond Fails to Agree With Terms, Withdraws Offer TXU EUROPE: Regulator Suspends Energy Trading in the U.K. TXU EUROPE: S&P Lowers Long-Term Corporate Credit Rating to 'D' =========== F R A N C E =========== ALCATEL: Moody's Downgrades Senior Debt Ratings to B1 ----------------------------------------------------- Moody's Investors Service downgraded the senior debt ratings of Alcatel from Ba1 to B1. It also assigned the company a B1 senior implied rating, while confirming its Not-Prime rating for short- term debt. The downgrade, which affects US$4.1 billion of debt securities, reflects "the severe contraction in Alcatel's revenue flow with no material indications of a near-term stabilization." Moody's is concerned of the full effect of cash consumption from operations after the company's primary sources of cash, working capital reductions and disposals of financial investments are exhausted. The outlook on all ratings is negative to reflect Moody's view of the need for further rating downgrades if the rate of the company's revenue decline continues. The rate currently exceeds 30%. The action also reflects the necessity of additional downsizing in case the current rate of business decline continues in 2003. Moody's says the company is affected by the impact of dramatic reductions in order from telecom operators just like other players in the sector. Lastly, the action reflects increasing constraints on the company's financial flexibility. Moody's believes that at the agency's estimated cash consumption rate from operation, the company's free liquidity could tide the company beyond 2003, but other sources of liquidity in addition to the EUR 5.1 billion cash balances have become more limited. Moody's warns that if the 30% rate of Alcatel's revenue decline is not halted, not even the company's cost-saving program would help achieve operating break-even during 2003. VIVENDI UNIVERSAL: Announces EUR 1 Billion Notes Offering --------------------------------------------------------- Following the completion of the offering to institutional investors on 14 November and the completion of the subsequent three-day retail offering in France on 19 November evening, Vivendi Universal (NYSE: V; Paris Bourse: EX FP) announced that the extension clause on its placement of notes mandatorily redeemable for Vivendi Universal shares had been exercised in full. The size of the offering has therefore been increased by E115.5 million to E1,000 million, including the full exercise of the over-allotment option for an amount of E114.5 million. The final terms of the transaction are as follows: 78,678,206 notes were issued with a nominal value of E12.71 each, raising a total nominal value of E1,000 million. The notes are mandatorily redeemable for Vivendi Universal shares on the basis of one share for one note, assuming redemption at maturity. The notes will carry an annual interest rate of 8.25%. The maturity date of the notes is 25 November 2005. The redemption will result in the creation of a maximum of 78,678,206 new shares, ultimately leading to a limited dilution effect of approximately 7%. This offering has been conducted in France on the basis of a preliminary prospectus which received the visa No. 02-1141 from the French Commission des Operations de Bourse on November 14, 2002 and a final prospectus, which received the visa No. 02-1146 from the COB. The preliminary prospectus comprises the Document de Reference of Vivendi Universal filed with the COB on April 23, 2002, the updated Document de Reference submitted to the COB on November 12, 2002, the Note d'Operation Preliminaire and the Note d'Operation Definitive. The final prospectus is comprised of the Document de Reference of Vivendi Universal filed with the COB on April 23, 2002, the updated Document de Reference submitted to the COB on November 12, 2002 and the Note d'Operation Definitive. CONTACT: Vivendi Universal Investor Relations Paris Laurence Daniel Phone: +33 (1).71.71.1233 or New York Eileen McLaughlin Phone: 212/572-8961 ============= G E R M A N Y ============= ALLIANZ GROUP: A.M. Best Places Rating Under Review --------------------------------------------------- A.M. Best Co. has placed the financial strength rating of A++ (Superior) of Allianz Aktiengesllschaft and its core subsidiaries under review with negative implications. Allianz's debt ratings of "aa+" have also been placed under review with negative implications. The "under review" status reflects A.M. Best's need to review the ultimate effect on Allianz's consolidated risk-adjusted capital base of the recently announced higher than expected loss of EUR 2.5 billion (USD 4.2 billion) in the third quarter of 2002, further falls in equity market values and continued negative results from Dresdner Bank. In addition, the EUR 2 billion (USD 3.3 billion) proposed new debt issue would increase the group's already high financial leverage. The current ratings factor Allianz's strong 22.1% growth in life business and improved non- life underwriting performance (non-life combined ratio improved by 2.9% to 101.5% in the first nine months, excluding non- recurring items). The financial strength rating of A++ (Superior) of the following core subsidiaries of Allianz has been placed under review with negative implications: -- Allianz Aktiengesellschaft -- Allianz Lebensversicherungs AG -- Allianz Versicherungs-AG -- Bayerische Versicherungsbank AG -- Frankfurter Versicherungs-AG -- Vereinte Krankenversicherung AG -- Vereinte Lebensversicherung AG -- Vereinte Versicherung AG -- Allianz-Elementar Lebensversicherung-AG -- Allianz-Elementar Versicherungs-AG -- Allianz Suisse Versicherungs-Gesellschaft -- Allianz Suisse Lebensversicherungs-Gesellschaft -- Hermes Kreditversicherungs-AG -- Riunione Adriatica di Sicurta SpA -- Assurances Generales de France IART -- AGF M.A.T -- Assurances Generales de France Vie -- Lloyd Adriatico SpA -- Cornhill Insurance PLC -- Allianz Insurance Company -- Allianz Underwriters Insurance Company The following debt ratings have been placed under review with negative implications: Allianz Finance B.V. II-- -- "aa+" rating on EUR 1.2 billion 1.25% guaranteed exchangeable bonds, due 2006 Allianz Finance B.V.-- -- "aa+" rating on EUR 767 million 6% guaranteed bonds, due 2003 -- "aa+" rating on EUR 767 million 5.75% guaranteed bonds, due 2007 -- "aa+" rating on DEM 2.0 billion 3% guaranteed exchangeable bonds, due 2003 -- "aa+" rating on EUR 1.6 billion 5% guaranteed bonds, due 2008 -- "aa+" rating on CHF 1.5 billion 3% guaranteed bonds, due 2005 -- "aa+" rating on DEM 1.7 billion 2% guaranteed exchangeable bonds, due 2005 Allianz Finance B.V. II-- -- "aa+" rating on EUR 2 billion 1.25% guaranteed exchangeable bonds, due 2004 A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. CONTACT: Public Relations A.M. Best Co. Jim Peavy Phone: +(1) 908 439 2200, ext. 5644 E-mail: james.peavy@ambest.com or Rachelle Striegel Phone: +(1) 908 439 2200, ext. 5378 E-mail: rachelle.striegel@ambest.com or Analysts Michael Zboron Phone: +(44) 20 7626 6264 E-mail: michael.zboron@ambest.com or Jose Sanchez-Crespo Phone: +(44) 20 7626 6264 E-mail: jose.sanchez-crespo@ambest.com BAYER AG: Receives FDA Clearance for Cerebrospinal Fluid Test ------------------------------------------------------------- Bayer HealthCare Diagnostics announced the U.S. Food and Drug Administration (FDA) clearance for its Cerebrospinal Fluid (CSF) assay automated on the ADVIAr 120 Hematology System. This is the first FDA cleared automated assay for spinal fluid analysis on a routine hematology analyzer. CSF testing provides results that may aid physicians in evaluating a variety of conditions including meningitis, encephalitis, neurological disorders, cerebral hemorrhage and some types of leukemia. "Until now, CSF testing has been subject to manual variability and has been one of our most labor intensive tests," said Timothy Flaming, supervisor at St. Mary's Medical Center, Long Beach, CA. "In addition to providing more precise test results, the availability of this automated test will allow us to deliver more timely results to physicians making critical therapy and disease management decisions." Conventional hematological CSF analysis requires laboratories to use manual methods that are time and labor intensive, requiring 30-45 minutes to complete, and can be subject to technician variability. With the CSF test automated on the ADVIAr 120 system, results are available in less than 5 minutes and eliminate hands-on sample management reducing the potential for operator error. The FDA cleared assay provides an in vitro diagnostic, quantitative determination of blood cells in CSF specimens. In addition, the ADVIAr 120 cerebrospinal fluid (CSF) method provides leukocyte (WBC) and erythrocyte (RBC) counts along with both absolute and proportional counts for the WBC differential. "Bayer HealthCare Diagnostics is committed to providing technology that enhances value to the laboratory and contributes to patient care," said Hans Hiller, senior vice president, Bayer HealthCare Diagnostics' Laboratory Testing Segment. "The FDA clearance is good news for laboratories and physicians. Now laboratories can automate this important diagnostic test and provide physicians greater confidence in their results, leading to more timely disease management decisions." ADVIAr 120 Hematology System The ADVIAr 120 Hematology System, established worldwide as a state-of-the-art laboratory system, is designed to assist healthcare professionals to monitor patients with cancer, kidney disease and anemia. This system allows laboratory professionals to perform routine blood tests, such as a complete blood count, white blood cell differential and reticulocyte analysis. The ADVIAr 120 Hematology System CSF assay benefits include excellent specificity and sensitivity, as well as automated testing on a system with proven reliability and precision, improved accuracy of reported results and turnaround time providing improved efficiencies to the laboratory. Bayer HealthCare Diagnostics With approximately 7,000 employees worldwide and 2001 sales of $1.8 billion, Bayer HealthCare Diagnostics (www.bayerdiag.com), based in Tarrytown, New York, U.S.A., is one of the largest diagnostic businesses in the world. The organization supports customers in 100 countries through an extensive portfolio of central, self-testing, nucleic acid and near patient care diagnostics systems and services for use in the assessment and management of health, including the areas of cardiovascular and kidney disease, oncology, virology, women's health and diabetes. Bayer HealthCare Diagnostics is a part of the worldwide Bayer Group, a $29 billion international health care and chemicals group based in Leverkusen, Germany. Bayer HealthCare Diagnostics' global headquarters in the United States operates as part of Bayer Corporation of Pittsburgh, a research-based company with major businesses in health care, life sciences and chemicals. COMMERZBANK AG: Fitch Lowers Long-Term Rating, Revises Outlook ------------------------------------------------------------- Fitch Ratings downgraded Commerzbank's Long-term rating to 'A-' from 'A', and revised the rating's Outlook to Stable from Negative. It also downgraded the bank's Short-term and Individual ratings to 'F2' from 'F1' and to 'D' from 'D/D', respectively. The Support rating of '2' was affirmed. According to the international rating agency, the action reflects Fitch opinion that: "Commerzbank will continue to struggle to report more than minimal operating profitability given the poor economic environment, despite intensified cost-cutting measures and relatively sound risk controls." Fitch also expresses concern on the bank's low capitalization, while noting the need for a strong profitable retail franchise to help it improve revenue generation and reduce loan loss provisions. The rating agency notes that the bank barely broke even in the first nine months of the year. It also doubts the bank's ability to return to a solid level of operating profitability in the medium term. While recognizing the initial benefits of Commerzbank's cost cutting measures, Fitch proceeded to say current measures are not yet sufficient to restore operating profit as revenues have declined while loan loss provisions increased. The agency acknowledges, though, that asset quality has held up better than at some of Commerzbank's German peers. Fitch considers Commerzbank's capital on the low side, and advises that the bank balance its capital ratio and ongoing reduction in risk-weighted assets. In a related rating action Fitch Ratings lowered the Long-term and Short-term ratings of Commerzbank's subsidiary, Hypothekenbank in Essen, to 'A-' (A minus) from 'A' and 'F2' from 'F1' respectively, and affirmed its 'B/C' Individual and '3' Support ratings as well as the 'AAA' on its Public Sector Pfandbriefe. COMMERZBANK: Fitch Ratings Lowers Residence 2000-1 Class B CLNs --------------------------------------------------------------- Fitch Ratings has downgraded the class B credit linked notes (CLNs) of the Residence 2000-1 transaction issued by Commerzbank AG to 'A-' from 'A'. The class B notes are directly linked to the credit quality of the originator Commerzbank. The rating downgrade is a result of today's downgrade of Commerzbank's long-term unsecured rating to 'A-' from 'A' by Fitch. The ratings for the class A notes, rated 'AAA', and class C notes, rated 'BBB', remain unaffected by this downgrade. CONTACT: Fitch Ratings Asina Ajwani Phone: +44 (0)207 417 3534 Matt Burkhard ===================== N E T H E R L A N D S ===================== GETRONICS N.V.: Standard & Poor's Revises Outlook to Negative ------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Getronics N.V. from stable to negative following the company's profit warning. It affirmed, at the same time, all ratings on Getronics, including its 'BB+' long-term corporate credit rating. Standard & Poor's credit analyst, Andre Rashid, said the outlook reflects "below-peer-average profitability, continuing price pressure in challenging markets, and a reduction in the company's business base." Mr. Rashid predicts that the information and communications technology group will not be able to achieve its year-end initial projections for operating margins. The analyst estimates EBITA at 12% below Getronics' previous estimate, at about EUR110 million, citing continuing depressed market conditions as reason for the fall-off. "Continuing below-peer-average profitability in depressed market conditions with increasing price pressure on core services will put pressure on Getronics' credit profile," Mr. Rashid added. The forecast for EBITDA net interest ratio is at the the low end of Standard & Poor's expectations of 4 times (x)-5x for the full year 2002. Standard & Poor's remains cautious about prospects for a recovery in the industry in the near term. The rating agency predicts slump in customer spending and increasing competition to pressure profitability. Standard & Poor's indicated to downgrade the rating if Getronics fall below the agency's expectation of a 6% improvement in profitability. ROYAL PHILIPS: Gives Update on a Number of Its Businesses --------------------------------------------------------- In a meeting with investors and financial analysts in Amsterdam, Royal Philips Electronics (AEX: PHI, NYSE:PHG) will provide a comprehensive update on business developments in its Lighting, Consumer Electronics, and Medical divisions, as well as the businesses in the recently dissolved Components division. On Philips Lighting, it will be shown that the business is outpacing it's competitors, delivering EBIT margins of approximately 12% for the year-to-date, whilst achieving record high delivery reliability and record low inventories. The division has a number one position in almost all markets served, and its strategy of focusing on innovation, marketing excellence and delivery reliability, while tightly controlling costs and assets is paying off. The recent win to become the exclusive supplier of branded light bulbs to Home Depot's 1,400 U.S. stores is a clear reflection of this winning approach. The high-tech aspect to the business will also be highlighted, including projection, extreme ultra-violet for use in wafer steppers, LCD backlighting, and solid-state lighting technology. The changes at the Components division will be further explained, including the rationale and impact of the measures announced in October. Focus will be given on Mobile Display Systems (MDS), which has accelerated the pace in the transition to color displays and is now ahead of the market. From a financial perspective, the targets for the sum of the parts of the former Components is to get the group back into the black for the full year 2003. This target will be particularly based upon eliminating the heavy losses at Philips Optical Storage within two quarters. Philips Medical Systems will confirm that the integration of recent acquisitions is on-track with the identified EUR 350 million cost synergies expected for the full year 2003. Excluding all special items and non-recurring items as well as the HCP business of the former Marconi Medical Systems, an EBITA of approximately 9% for the full year 2002 is expected, whilst the target of 14% EBITA for the business in 2004 will be confirmed. The annual sales target for 2004 remains unchanged in volume terms, but as a result of exchange rate movements becomes EUR 7.3 billion instead of EUR 8 billion (75% of sales are in USD or USD- related currencies). New product and technology introductions are expected to drive business development further, with the recent FDA approval of the HeartStart home defibrillator and live 3D Echocardiography ultrasound imaging of a beating heart indicated as two unique success points. Philips Consumer Electronics will confirm that the turnaround of its business in the key US market is proceeding with success, and the strategy is paying off with 142% sales growth in up-market retailers, and 55% year-on-year growth in the branded TV segment, both cases reflecting the successful development of Philips as a premium brand. For the Consumer Electronics division as a whole, the business is on course for a good fourth quarter, October having been a record month, and November also looking strong, mainly as a result of operational improvements. Consumer Electronics will also announce that the Digital Networks business will be integrated into other parts of the company, with the main set-top box business moving to Consumer Electronics. The change will deliver R&D synergies and enhanced cooperation, better utilization of the retail sales channel and lower overheads. No restructuring charge will be required, but savings will be realized. Digital networks will no longer appear as a separate line in Philips' financial statements after the fourth quarter. Jan Hommen, Philips' Vice Chairman and Chief Financial Officer commented: "It's encouraging to see that even in a continuing tough market, our focus on improving operational performance in many areas including costs, marketing and innovation, is delivering results. We reconfirm as we had already indicated at the release of the Q3 earnings, that we expect to take restructuring and impairment charges in the fourth quarter, and that there could also be adjustments to fair market value of certain securities we hold. We expect to go into 2003 with these issues largely behind us." =========== P O L A N D =========== NETIA HOLDINGS: Sets Hearing Date for Netia South Arrangement ------------------------------------------------------------ Netia Holdings S.A. (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services (in terms of value of generated revenues), announced that the court hearing to approve the arrangement plans for Netia South Sp. z o.o., a wholly owned subsidiary of Netia, in the Polish arrangement proceedings will be held on December 4, 2002. The arrangement plan for Netia South was unanimously adopted by its creditors entitled to vote at the creditors' meeting on August 29, 2002. The ratification hearing with respect to Netia South's arrangement plan in Poland is the final stage of the arrangement and composition proceedings, in connection with Netia's ongoing restructuring. On November 6, 2002, the Dutch court ratified the composition plans of Netia Holdings B.V., Netia Holdings II B.V. and Netia Holdings III B.V., Netia's three Dutch finance subsidiaries. The Dutch court's decisions became unappealable on November 15, 2002. The arrangement plans for Netia and Netia Telekom S.A., a wholly owned subsidiary of Netia, were approved on August 9, 2002 and June 25, 2002, respectively. Once all Polish and Dutch court decisions approving the arrangement plans and composition plans become final and unappealable, Netia will be able to complete the restructuring in accordance with the Restructuring Agreement, dated March 5, 2002. CONTACT: Netia Anna Kuchnio (IR) Phone: +48-22-330-2061 Jolanta Ciesielska (Media) Phone: +48-22-330-2407 or Taylor Rafferty, London Alexandra Jones, +44-(0)20-7936-0400 or Taylor Rafferty, New York Jeff Zelkowitz Phone: 212/889-4350 =========== S W E D E N =========== LM ERICSSON: Intec Buys 'Settler' Interconnect Billing Product ------------------------------------------------------------- The Board of Intec Telecom Systems PLC (ITL.L) is pleased to announce that it has signed an agreement with Ericsson AB of Sweden to acquire Ericsson's 'Settler' interconnect billing product unit, including the Settler development team and worldwide rights to develop and market the Settler product range. The agreement includes further cooperation between the two companies where Ericsson will continue to offer solutions based on Settler as well as Intec's InterconnecT product suite. The total consideration, to be settled in cash, amounts to US$5.1 million ((pounds)3.3 million). The acquisition will be revenue and earnings enhancing, generating new license revenues, related services work and recurring revenues for support and maintenance. Interconnect systems are used by telecom carriers and service providers to calculate and bill the charges levied for carrying each other's telecom traffic. These charges generally represent the largest single transactions that a telecom operator undertakes on a regular basis. A key benefit of the agreement is the synergies that will be achieved. Ericsson has a direct presence in some countries where Intec has none, enabling a greater reach. In other areas, where the two companies have previously competed fiercely, efforts can be re-directed to other productive opportunities. "Ericsson has developed a strong, worldwide customer base for Settler," said Intec's Executive Chairman, Mike Frayne. "By acquiring this product unit we not only bring in a useful additional revenue stream and wider sales channels, but also some interesting technical capabilities in areas such as Least Cost Routing." The agreement also enables Ericsson as well as other successful Settler partners to be able to offer their telecom customers Intec billing technology from either the InterconnecT or the Settler range. "With a portfolio of own and third party products, Ericsson will continue to act as a major systems integrator in the area of charging and business support solutions," said Mikael Backstrom, head of Systems Integration at Ericsson Global Services. "Divesting the Ericsson product for interconnect settlements to Intec will ensure continued access to excellent products from a leading software vendor and strengthen Ericsson's offering in this area." Intec Telecom Systems Intec Telecom Systems is a leading worldwide operations support systems (OSS) vendor for fixed, mobile and IP/next-generation networks, with a product portfolio that includes convergent mediation, intercarrier billing, activation, and revenue assurance software. With more than 285 customers worldwide, many of the world's largest telecom operators - including BellSouth, Verizon, Cable & Wireless, France Telecom, Telstra and Vodafone - rely on Intec solutions for critical components of their revenue generation chain. For more information on Intec (London Stock Exchange Code: ITL.L), visit www.intec-telecom-systems.com. CONTACT: Intec Telecom Systems Kathleen Forbes Phone: 404/705-2847 E-mail: kathleen.forbes@intec-telecom-systems.com or Calysto Communications Justin Siefert Phone: 404/266-2060 x20 E-mail: jsiefert@calysto.com ===================== S W I T Z E R L A N D ===================== CREDIT SUISSE: Winterthur Life Launches New Investment Bond ----------------------------------------------------------- Winterthur Life, the Life & Pensions arm of the Credit Suisse Group, announced the launch of its first multi-manager unit linked investment bond. The Winterthur Investment Bond exploits the full potential of the bond format, bringing together all the best features of this type of product in one uniquely flexible 'wrapper'. Although this bond will appeal to the traditional unit linked life bond market the needs of the trustee investor have been particularly borne in mind during the development stages of this product. With up to four lives assured the Winterthur Investment Bond offers greater control over tax and investment planning. The bond's ability to be issued in 99 individual policy segments - each of which can be administered separately for premiums, investments, withdrawals and ownership purposes throughout its life - means it is truly segmented and enjoys the full benefits of this product structure. A key feature of this product is its fund choice, and investors will have access to over 45 top funds and seven managed portfolios including the Winterthur Elite Managed Range. The design of the bond allows the investor to automatically realign investments to the original asset allocation each quarter for portfolio rebalancing. In line with the recommendations of the recent Sandler report, the bond has a clear and fair charging structure, with no bid offer spread, no exit penalties and free unlimited fund switching. Commenting on the design of the bond Angela Baskeyfield, product development manager at Winterthur Life said: "Whilst designing this bond we have looked not only at the taxation aspects important to this area of the market but at the investment control and planning issues. We feel this is one of the most complete products on the market. You may be able to find some of the features that this investment bond offers elsewhere but I doubt that you will find all of them." Commenting on the launch of this new product, Mike Kellard, sales and marketing director, Winterthur Life said: "The introduction of an investment bond is a progression for Winterthur, but a natural extension of its product range and one that fits well with our investment philosophy. In line with Sandler's recent recommendations our unique Flexible Adviser Remuneration, which bridges the gap between commission and fees for advisers and clients alike provides this product with a clear and open charging structure. We believe that this product will add another weapon to the IFAs armoury for investment solutions and build on Winterthur's reputation for multi-manager expertise." The minimum investment is GBP15,000*. *All cases over GBP1 million need to be agreed by Winterthur Life prior to application. A full list of product features together with the terms and conditions can be found within the product literature, which is available on request. About Winterthur Life UK Limited - Winterthur Life UK Limited is one of the UK's top ten providers of Group Personal Pensions and Single Premium Personal Pensions via IFAs and a leading provider of SIPPs (Self Invested Personal Pensions). - Winterthur Life is renowned for its innovative approach to pensions, and offers flexible products that are structured to today's market. A key feature of the Winterthur Life approach is the use of external fund managers - with a choice of 42 carefully selected funds from 19 award winning fund managers or the innovative Elite Funds - which draw on a combination of different funds to offer three risk rated managed funds. - Winterthur Life is part of Credit Suisse Financial Services and CSFS is part of Credit Suisse Group. - Winterthur Life UK Limited is regulated by the Financial Services Authority. CREDIT SUISSE GROUP Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium- sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 80,000 staff worldwide. As of September 30, 2002, it reported assets under management of CHF 1,221.8 billion. CREDIT SUISSE: Turnaround to Entail More Job Cuts, Says Co-CEO -------------------------------------------------------------- Designated co-Chief Executive Oswald Gruebel predicts more job cuts at Credit Suisse as the company brings its banking and insurance units to profitability. In an interview with Credit Suisse's client magazine, Mr. Gruebel said he foresees further reductions in the bank's European banking operations and cuts in the loss-making Winterthur insurance area. Credit Swiss earlier announced it will cut some 1,300 jobs in its Swiss banking operations. Referring to changes in Wintherthur he said, "[I] assume that we can achieve this [return to profitability] through normal staff turnover and company growth." Reiterating the company's intent to focus on private banking, Mr. Gruebel said the move will affect the sale organization and thus staff members. Meanwhile, according to Reuters, a Credit Suisse spokeswoman said there were no concrete job cut targets; in fact the group added staff at the Winterthur unit during the first nine months of the year. A total of more than 2,000 positions in its life- and non- life units were added. While indicating that creating jobs at Winterthur will continue, the spokeswoman says "but we need to become more efficient in selected areas." CREDIT SUISSE: Winterthur Pensiones Launch New F100 --------------------------------------------------- In order to tackle the difficult situation currently affecting the world economy and equity markets in particular, Winterthur Pensiones unveils their "Plan de Pensiones Individual Winterthur F100", with all its assets invested in fixed interest securities. High market volatility has led to new demands of our customers, who are seeking alternatives for recent inconsistent equity performances in the safe investment offered by fixed interest securities. This has prompted Winterthur Pensiones to create its fifth Pension Plan, the F100, which completes our range of Pension Plans. Investing in a Pension Plan is an investment in your future well- being. Arrange your plan with Winterthur, with the security offered by one of the top insurance groups in Spain. Characteristics: - Integrated in the Winterthur VII Pension Fund - 100% of its capital in fixed interest securities - Inverco Classification: Fixed Interest Securities - Management fee: 1.25% of the Pension Plan assets - Depository fee: 0.05% of the Pension Fund assets - Depository: Santander Central Hispano Investment Winterthur Life & Pensions Winterthur Life & Pensions (Winterthur Life and subsidiaries), a Credit Suisse Group division, is one of the leading European life insurers. It offers individual and corporate clients tailor-made, local and international life insurance and pension solutions. Winterthur Life & Pensions achieved a premium volume of CHF 17.4 billion in 2001 and reported assets under management of CHF 113.0 billion as of September 30, 2002. There are more than 7,000 people working for Winterthur Life & Pensions all over the world (around 15,000 including sales agents). Credit Suisse Group Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium- sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 80,000 staff worldwide. As of September 30, 2002, it reported assets under management of CHF 1,221.8 billion. CONTACT: Laura Sanz, Winterthur Vida, Comunicaci�n Phone: 93 290 63 31 E-mail: laura.sanz@winterthur.es SWISS INTERNATIONAL: Reduces Excess Planes From Fleet ----------------------------------------------------- State-backed Swiss International Air Lines decided to take out eight planes from its fleet, agreeing that it has excess carriers for a weak market. According to Reuters, critics deem the airline's long-distance fleet of 26 planes too big to serve a country the size of Switzerland. Swiss had the fourth-largest fleet in Europe after Germany's Lufthansa, Air France and British Airways. The carrier will do away with one long-haul plane and one medium- haul plane, three charter aircraft and three 50-seat regional planes. The reduction is expected to displace 300 employees of the 10,000 workers the airline has. Swiss, which expects to boost earnings by CHF400 million (US$274.3 million) from the cuts, assured it would create 200 new jobs in technical services and the IT sector. It expects to reach break-even in 2003. The airline also disclosed that its loss for the third quarter of 2002 was CHF135 million, including CHF60 million of exceptional write-downs and CHF15 million one-off costs. Its nine-month loss is CHF582 million. Swiss was created from the combination of former regional carrier Crossair and two-thirds of the fleet of failed airline Swissair. Public authorities and Swiss companies had injected CHF2.7 billion capital in a national aviation sector rescue plan. SWISS LIFE: Corporate Executive Board Member to Resign ------------------------------------------------------ Hans-Rudolf Strickler, a member of the Corporate Executive Board of Swiss Life/Rentenanstalt since June 2001, in which capacity he was responsible for European business, has decided to leave the organisation at the end of December 2002. The new ad interim head of the the International Division, with immediate effect, is Ren, van der Smeede, CEO of Swiss Life in the Netherlands. Hans-Rudolf Strickler: "The discussions concerning LTS AG will go on for quite some time yet, in view of the investigations being conducted by the authorities. Even though I am convinced that my actions with regard to my personal involvement in LTS AG were not improper, I hope that my resignation from the Corporate Executive Board will help bring greater objectivity to the current discussion and make it possible to avoid further damage to the organisation." Rolf D"rig, Swiss Life/Rentenanstalt CEO: "I have great respect for Mr Strickler's decision. It is of decisive importance that the discussions regarding LTS AG should not hinder us in implementing our organisation's new strategy, on the basis of the capital increase now successfully under way. I would like to thank Hans-Rudolf Strickler for his great commitment to our company." Ren, van der Smeede has been CEO of Swiss Life Netherlands since 1998. Before joining the company, he spent 10 years in various management positions with the Dutch insurer AEGON. In the course of his career, he also worked in Spain as director of a subsidiary of the Dutch insurer ENNIA. He served as vice- president of the Netherlands association of actuaries and headed the Netherlands association of life insurers. Mr van der Smeede is 54 years old and married. CONTACT: Rob Hartmans Phone: +41 1 284 77 63 E-mail: rob.hartmans@swisslife.ch Christoph Braschler Phone: +41 1 284 47 12 E-mail: christoph.braschler@swisslife.ch General-Guisan-Quai 40, P.O. Box, 8022 Zurich Home Page: http://www.swisslife.com =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: CEO's Proposal Likely to Cost Significant Losses ---------------------------------------------------------------- The new chief executive of Abbey National, Lugman Arnold, is expected to announce a cut in the bank's dividend and significant writedowns that would cost the institution a GBP1.5 billion full- year loss. The expectation prompted Merril Lynch to downgrade the bank's rating from "neutral" to "sell". According to Times Online, banking analyst John-Paul Crutchley expects a cut in the dividend, in line with a lower base of future profits, with the current year payout falling from 50p to 30p. The successor of former chief executive, Ian Harley, is set to deliver Abbey's trading statement next Wednesday. Mr. Arnold is tasked with repairing the bank's balance sheet. Abbey is still currently looking for a bidder after it turned down offer from Bank of Ireland. AORTECH INTERNATIONAL: Posts GBP7.6 Million Loss in Results ----------------------------------------------------------- AorTech International plc, the Scottish-based manufacturer of cardio-vascular devices, announces its Interim Results for the six months ended 30 September 2002 and its proposed move to the Alternative Investment Market. Highlights Operating loss for the period: GBP7.6 million (H1 2001: loss GBP5.1 million) Increased loss for the period reflects lower gross margins from product sales, costs associated with the aborted Becton Dickinson acquisition and a one time rationalization charge of GBP1.2 million Completion of restructuring programme Projected annualised cash burn expected to be reduced to GBP6 million compared to GBP16 million for the year to 31 March 2002 New tissue valve manufacturing plant in Leeds became operational in April Tri-Leaflet Heart Valve - Root causes of the adverse performance issues identified, with corrective action programme underway. Post-Period Events Laurie Rostron to succeed Eddie McDaid as Chairman on 20 November 2002 Application for Admission to AIM, dealings expected to commence on 18 December 2002 Eddie McDaid, Chairman, commented: "During the last six months, the Company has completed a restructuring and rationalization programme. Having completed six years as Chief Executive and latterly Chairman, I feel that now is the appropriate time to step down and hand over the reins to the new management team who are well placed to maximize the value of AorTech's technologies for shareholders". CONTACT: AorTech International plc Bill Strachan, Chief Executive Ian Cameron, Finance Director Phone: 01698 746699 College Hill Nicholas Nelson Clare Warren AORTECH INTERNATIONAL: Wider Losses, Chairman's Exit Hit Shares --------------------------------------------------------------- The shares of Aortech, the heart valve manufacturer, went down more than 31% Tuesday after the Scottish biotech reported wider half-year losses and revealed the resignation of its chairman. Aortech's shares, which traded at GBP10.30 in February 2000 closed at 6.75 p. Lauri Roston, a pharmaceutical venture capitalist, will take over as non-executive chairman in the company. The Bellshill-based company increased re-tax losses by almost 50% to GBP7.6 million, as its chairman and founder, Eddie McDaid, leaves the company. Aortech, in its report, warned of selling some intellectual property and announced plans to retreat from the main London Stock Exchange to move to the Alternative Investment Market. The company, whose profitability it claims is being hampered by high costs and insufficient volume, has market capitalization reduced from more than GBP300 million to just GBP5.1 million. The collapse of the deal with U.S. firm Becton Dickinson earlier, and a GBP1.2 million restructuring charge and slim margins prompted the biotech company to issue a profit warning in September. Chief executive Bill Strachan, hopeful for a solution said, "Our true core business is still at the stage of development and developing these products is extraordinarily expensive. So we are in talks with a number of parties about possible partnership agreements." The chief executive also gave assurances that the company is not considering job cuts for its 130-person workforce. MARCONI PLC: Dispute With Creditor to Postpone Debt Refinancing --------------------------------------------------------------- Disagreement with creditors regarding Marconi's funding plan may postpone the refinancing of the company's EUR4 billion (US$6.3 billion) debt beyond January, says people close to the process. The phone equipment maker is concerned about the agreed interest rate for a GBP100 million credit from lending banks, says the Financial Times. The interest could be as high as 15%. As part of the refinancing agreement, Marconi will give creditors GBP260 million in cash. The terms of the loan, however, is feared to prevent the company from keeping the obligation. The report, meanwhile, assures that the company's reorganization, which is expected complete by end of January 2003, is not in danger. The plan grants 99.5 of Marconi's stock to banks and bondholders. NTL INC.: Broadcast Increases U.K. Digital Radio Channels --------------------------------------------------------- - NTL Broadcast announces first contract win with The Wireless Group for digital radio transmission - NTL Broadcast achieves milestone of over 250 digital radio channels across the U.K. - Latest deals with TWG Digital, Score and Now Digital secure NTL Broadcast over 90% of available DAB digital radio transmission in the U.K. having installed 28 digital multiplexes NTL Broadcast has announced contract wins to maintain its leading position in digital radio transmission. Following on from a highly successful 2001, NTL has won its first deal with The Wireless Group (the lead in the TWG Digital partnership with Emap), for Bradford & Huddersfield, in addition to also supplying Dundee & Perth (Score Digital), Exeter & Torbay (Now Digital) with local multiplexes. NTL Broadcast has now installed 28 digital multiplexes across the U.K. including the Digital One national service, carrying over 250 channels. Kelvin MacKenzie, chairman and chief executive at The Wireless Group commented, "We are delighted to confirm our first contract with NTL Broadcast for the provision of digital multiplexes in Bradford and Huddersfield. NTL demonstrated not just expertise in digital radio technology but also excellent coverage across the U.K. and, vitally, future-proof technology." Dick Buckle, radio sales manager at NTL Broadcast, said, "We are very pleased to have signed our first digital contract with The Wireless Group - we are looking forward to building upon that relationship in the future and providing them with many more services. After an extraordinarily successful 2001, these latest projects will mean that we will further increase our market share at the forefront of digital radio transmission by providing broadcast services for local and regional networks. We are now seeing the momentum we have built up over the last 18 months for the digital radio industry continue to gather pace as radio stations look to explore and take advantage of this medium." Since the beginning of the year, NTL Broadcast has also brought multiplexes into service for Digital Radio Group (Greater London III), Now Digital (Southend & Chelmsford, Bournemouth and Exeter & Torbay) and Score Digital (Ayr and Dundee & Perth). NTL Broadcast has key locations on its parent company's national fibre network across the U.K. that enables NTL to provide contribution, distribution, multiplexing and transmission, for local and regional networks. NTL has now won transmission contracts for MXR, Emap Digital, Capital Radio Digital, Now Digital, Score Digital, CE Digital, Digital Radio Group and TWG Digital. Transmissions to begin in the next few weeks are Bradford & Huddersfield, Leicester and Peterborough. About NTL Broadcast - The Broadcast division of NTL has a 47-year history in transmission and has helped pioneer the technologies of the digital age. - 22 million U.K. homes receive ITV, Channel 4 and Channel 5 via NTL's broadcast transmitter networks. NTL Broadcast also provides transmission for most UK independent radio stations, both analogue and digital. - NTL provides end-to-end media solutions to the broadcast industry across terrestrial, cable and satellite platforms. This includes satellite uplinking, satellite newsgathering, outside broadcast facilities, programme presentation, play-out and distribution. - With a portfolio of over 2300 radio sites across the U.K., NTL's Wireless Solutions group specialises in end-to-end mobile and cellular network infrastructure, from site sharing and in- building solutions to access circuits, managed back-haul and core network provision. - NTL is assisting other countries with new broadcast systems and the introduction of digital services. Operations are already established in south-east Asia. - Further information can be found at www.ntl.com/broadcast CONTACT: Bruce Randall, NTL, Winchester Phone: +44 (0)1962 822582 Fax: +44 (0)1962 822374 E-mail: bruce.randall@ntl Home Page://www.ntlbroadcast.com Nicola Salvage/Dan Purvis Nelson Bostock Communications Phone: +44 (0)20 7229 4400 Fax: +44 (0)20 7792 7411 E-mail: nicola.salvage@nelsonbostock.com PIZZAEXPRESS: Osmond Fails to Agree With Terms, Withdraws Offer --------------------------------------------------------------- Hugh Osmond, former owner of PizzaExpress, withdrew its plan to bid for the British restaurant chain after the entrepreneur's bid vehicle failed to reach agreement with the group's advisers on the terms of the indicative offer proposal. Twigway's advisers, ING Barings, revealed the information. The investment vehicle made an indicative offer of 330-350 a share, valuing the chain at about GBP250 million (US$375 million). According to Times Online, the Takeover Panel criticized Mr. Osmond for suggesting he would not be prepared to raise the indicative offer above 350p a share. Observers hope that Mr. Osmond's reluctance to increase the bid would trigger a bidding war for the chain. The comment particularly refers to leisure group, Whitbread, which is seen as a possible contender. The report also says that Luke Johnson, a former owner of the pizza chain, might be interested in bidding. TXU EUROPE: Regulator Suspends Energy Trading in the U.K. --------------------------------------------------------- The Balancing and Settlement Code Panel, the entity overseeing rules covering power trading in the U.K., suspended TXU Europe from buying and selling electricity and natural gas in the U.K., Bloomberg reports. The nuclear generator, which recently went into receivership, was prohibited from trading after midnight Nov. 28, says Elexon, a company that helps run U.K.'s power-trading system. Sally Fishleigh, a spokeswoman for Elexon, said halting the company's trading is one option of the panel when a company goes in default of the code. She said that going into administration is one way of defaulting. 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. KPMG and Ernst & Young were appointed administrators for the energy company. The company, which has debts of more than GBP3 billion, was hit by power prices slump in the U.K. TXU EUROPE: S&P Lowers Long-Term Corporate Credit Rating to 'D' -------------------------------------------------------------- Standard & Poor's Rating Services downgraded the long-term corporate credit rating on TXU Europe Group PLC to 'D' from 'CC' following the energy company's filing for administration. The debt ratings for two affected bonds were also lowered to 'D' from 'CC'. The action follows for other group entities, which filed for administration along with TXU Europe Group. Standard & Poor's credit analyst, Paul Lund, says the downgrade also lowers the remaining senior unsecured debt of TXU Europe Ltd., TXU Eastern Funding Co., and their subsidiaries from 'CC' to 'D'. S&P explains that the filing for administration constitutes an event of default that is why the ratings were put to D even if bond payments have not been missed yet. The ratings were removed from CreditWatch, where they were placed on Oct. 10, 2002. ************ 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 members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *