/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/021219.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, December 19, 2002, Vol. 3, No. 251 Headlines * F R A N C E * ALCATEL: Extends Stronghold as Leader in Worldwide DSL Market ALCATEL: Announces Opening of Public Offering of Notes * G E R M A N Y * HVB GROUP: Securitizes Credit Risks of Austrian Companies INFINEON TECHNOLOGIES: Signs Agreement Worth US$2.5 Billion * L U X E M B O U R G * MILLICOM INTERNATIONAL: Corporate Credit Rating Lowered to 'CCC' * S P A I N * CAJE DE AHORROS: Fitch Downgrades Individual Rating to 'B/C' * S W E D E N * LM ERICSSON: Fitch Assigns Senior Unsecured Rating of 'BB' LM ERICSSON: Issues Comments On First Rating by Fitch INTENTIA INTERNATIONAL: To Appeal Tax Commission's Decision SONG NETWORKS: Plan of Composition Becomes Irrevocable SONG NETWORKS: Rights Issuance Fully Guaranteed SONG NETWORKS: S&P Lowers Senior Unsecured Debt Ratings to 'D' * S W I T Z E R L A N D ABB LTD.: Signs US$1.5 Billion Credit Facility With Banks CREDIT SUISSE: CSAM Announces Organizational Changes * U N I T E D K I N G D O M * AVECIA GROUP: Moody's Lowers Ratings, Assigns Negative Outlook BAE SYSTEMS: Pension at Risk Without Government Action BUSINESS A.M.: Operation to Close by the End of the Week COLT TELECOM: Role of KMPG Questioned in Suit With Highberry GLAXOSMITHKLINE: Receives Second Approvable Letter for Advair MARCONI PLC: Faces Lawsuit Filed by Paris-based Company R. TERLEY: Pepper and Gray Appointed Joint Interim Managers =========== F R A N C E =========== ALCATEL: Extends Stronghold as Leader in Worldwide DSL Market ------------------------------------------------------------- Alcatel (Paris: CGEP.PA and NYSE: ALA) continued to lead the worldwide market for digital subscriber line (DSL) equipment in the third quarter of 2002 with global cumulative market share of 37 percent, according to data from industry analysts Dell'Oro Group. At quarter end Alcatel shipped a total of 20.8M DSL lines worldwide, more than four times the volume of any other vendor. Alcatel's share of quarterly shipments in the EMEA market (Europe, Middle East, and Africa), representing 29 percent of the global market, jumped by over 12 points from the previous quarter to 50 percent with the nearest competitor at only 17 percent. Alcatel's quarterly shipment share also grew impressively in the Asia Pacific region jumping six points to 16 percent. The Alcatel 7300 Advanced Services Access Manager (ASAM), the word's most widely deployed broadband access platform, and Alcatel Litespan Next Generation Digital Loop Carrier (NGDLC) systems, are the cornerstones of Alcatel's market dominance and are prominent in the networks of over 70 of the world's largest carriers, delivering business and residential broadband services. "Worldwide broadband adoption is set to explode and we predict the number of subscribers will rise to over 100 million by 2005," said Michel Rahier, president of Alcatel's broadband networking activities. "Alcatel firmly believes a roll-out of broadband services on this scale would have the power to stimulate the global economy and provide great benefits for society as a whole. DSL is the dominant broadband technology and Alcatel is in a leading position to play a key role in this burgeoning market." Alcatel's extensive list of broadband customers includes some of the largest service providers around the world including Bell Canada, BellSouth, British Telecom, China Telecom, France Telecom, SBC, Telstra and Verizon. About Alcatel Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EURO 25 billion in 2001, Alcatel operates in more than 130 countries. ALCATEL: Announces Opening of Public Offering of Notes ------------------------------------------------------ Following the completion of the offering to institutional investors of notes mandatorily redeemable for Alcatel Class A shares on December 12, for an amount of Euro 630 million, Alcatel (Paris : CGEP.PA and NYSE : ALA) announced the opening of a public offering to individuals in France from 9 am on the 17th of December 2002 until the closing of the Paris Stock Exchange on the 19th of December 2002. This press release does not constitute an offer for sale of securities in the United States or any other jurisdiction. The notes will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. About Alcatel Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EURO 25 billion in 2001, Alcatel operates in more than 130 countries. ============= G E R M A N Y ============= HVB GROUP: Securitizes Credit Risks of Austrian Companies --------------------------------------------------------- The HVB Group is now issuing its third securitization transaction under the KfW PROMISE program to the capital market, under the name PROMISE Austria-2002 Plc. The loans to be securitized with a total volume of EUR1 billion were granted by Bank Austria Creditanstalt AG (BACA) to small and medium-sized Austrian companies. This is the first Austrian securitization deal this year. The previous two ABS deals with underlying Austrian assets to date were brought to market in 2001. The move represents a continuation of the HVB Group's policy of boosting its activities in this field. The objective is to reduce the bank's risk capital as part of a corporate-wide liquidity and balance sheet management program, and hence to release regulatory capital and transfer risk to the capital market. In this transaction, the credit risk from more than 2,300 BACA loans are being securitized in the form of asset-backed securities. The transaction has a total volume of around EUR1 billion, of which EUR205 million will be placed on the capital market in the form of ABS bonds. The static reference pool contains loans to more than 1,200 different Austrian Mittelstand borrowers. The average exposure amounts to EUR808,740 per borrower and EUR431,720per loan. The portfolio is highly diversified in terms of the industries covered, and the loans have an average age of approximately 3 Ť years . The tranches will be repaid in line with a master amortization plan, which means the investors can schedule in the repayments. The tranches have an average term of about 2 1/2 years. The expected final term is around 3 1/2 years, while termination is not possible before May 2006. This transaction gives institutional investors the opportunity to invest in the corporate risk of small and medium-sized Austrian companies. This is the first public ABS placement to make this possible. Compared with its European peers, the Austrian economy is currently showing positive signs and developing well, notwithstanding the current general economic downturn. Innovative ABS transactions as risk management tool PROMISE Austria-2002 means that the HVB Group, working in conjunction with KfW, will succeed in releasing regulatory capital. The risk is transferred by means of a loss guarantee provided by KfW for the entire reference portfolio. In turn, KfW places the credit risk assumed on the capital market in the form a tranche using a senior credit default swap with an OECD bank, and in the form of a junior tranche - comprising ABS bonds with different credit ratings - involving a special purpose vehicle (SPV). The SPV based in Ireland assumes the risk from the junior tranche by acquiring KfW bonds, and covers the risk assumed by issuing ABS bonds with a repayment profile equivalent to that of the KfW bonds. Since the loans no longer contain any credit risk for BACA on account of the KfW guarantee, there is no longer a need to provide any capital backing. This helps to enhance the risk structure in the bank's corporate customer operations and also releases a large amount of equity capital for other purposes. One of these involves new lending to small and medium-sized businesses in Austria. CONTACT: BAYERISCHE HYPO- UND VEREINSBANK AG Presseabteilung Am Tucherpark 16 80538 Munchen Phone: (089) 378-2 58 01/-2 55 12 Fax: (089) 378-2 56 99 Dr. Knut Hansen Phone: +49 (0)89/378-24644 E-mail: knut.hansen@hvbgroup.com INFINEON TECHNOLOGIES: Signs Agreement Worth US$2.5 Billion ----------------------------------------------------------- Infineon Technologies AG (FSE:IFX)(NYSE:IFX) and Kingston(R) Technology Company, Inc., announced that they have signed a Long- Term Agreement (LTA) and a non-binding Memorandum of Understanding (MoU) to strengthen each company's position in the worldwide memory products market. Under the LTA, Infineon will supply Kingston with leading edge DRAM components, with potential cumulative revenue estimated at up to US $2.5 billion over the next five years. Infineon and Kingston are expanding their existing longstanding business relationship to improve each company's ability to supply memory components and modules to computer system manufacturers and after market customers. In addition to the LTA, the companies have signed a MoU with the intention for Kingston to provide contract manufacturing and back-end engineering services to Infineon. "The expanded relationship with Kingston enhances our ability to build market share, gain increased production flexibility to meet the requirements of key customers, and control our direct investment in back-end manufacturing capability," said Dr. Harald Eggers, Memory Products Group CEO at Infineon Technologies AG. "Kingston's strong market presence and expertise in the engineering and production of modules makes the company an excellent partner in the execution of our business strategy." "Infineon grew to be a key player in the global DRAM industry through a combination of technology leadership and commitment to establishing effective cooperative relationships to meet market requirements," said David Sun, Co-Founder of Kingston. "High production yields at competitive cost is the key to continued success for DRAM suppliers, and Infineon's commanding lead in 300mm production technology and constant innovation in process technology assures competitive cost position and the ability to meet volume commitments." Infineon, which is ranked by the market research firm iSuppli as the world's third largest manufacturer of memory ICs for the second quarter of calendar 2002, will provide Kingston with DRAM from its worldwide network of fabrication plants. Kingston, ranked by market researchers as the world's largest independent memory module manufacturer, designs, assembles, and tests memory modules in its multiple regional manufacturing facilities (China, Malaysia, Taiwan, and the Unites States) for its customers. Kingston will also provide engineering services to Infineon in the form of component and module validation at its fully owned subsidiary Advanced Validation Labs Inc., an Intel approved test lab that can support OEM test requirements for acceptance of new die shrinks and module designs. These services will help Infineon to secure access to new computer systems and accelerate qualification and time-to-market of Infineon DRAM products. About Infineon Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In the fiscal year 2002 (ending September), the company achieved sales of Euro 5.21 billion with about 30,400 employees worldwide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com About Kingston Technology Company, Inc. Kingston Technology Company, Inc. is the world's largest independent manufacturer of memory products. Kingston operates manufacturing facilities in Malaysia, Taiwan, China and Fountain Valley, Calif., including Payton Technology Corp., Kingston's back-end processing facility supporting memory packaging, test and logistics. With the advent of Payton, Kingston supports all memory processing functions from receipt of wafer to completed module. Kingston serves a network of distributors, OEMs, and retail customers in more than 3,000 locations worldwide. For more information on Kingston, call (800) 337-8410, or go to www.kingston.com. All brand or product names may be trademarks or registered trademarks of their respective companies. CONTACT: KINGSTON TECHNOLOGY Heather Jardim Phone: 714/438-1817 Heather_Jardim@kingston.com or EMEA Public Relations Brigitte Haas Phone: +44 (01932) 738813 E-mail: bhaas@kingston-technology.com or Infineon (Investor Relations) Phone: +49 89 234 26655 / 26155 E-mail: investor.relations@infineon.com =================== L U X E M B O U R G =================== MILLICOM INTERNATIONAL: Corporate Credit Rating Lowered to 'CCC' ---------------------------------------------------------------- Standard & Poor's Ratings Services downgraded Millicom International Cellular's corporate credit rating to 'CCC' from 'B+', and its subordinated debt rating to 'CC' from 'B-'. The ratings are under CreditWatch with negative implications. The action follows the international cellular provider's advice that the company is reviewing strategic alternatives to address ongoing liquidity concerns. Millicom has total consolidated debt of US$1.4 billion as of September 30, 2002. S&P credit analyst Catherine Cosentino said that the review includes potential debt restructuring, warning that the ratings may further be downgraded due to the uncertainty of the company's prospective liquidity. The company offers cellular phone service in regions with limited wireline infrastructure. Its holdings in 19 cellular operations represent about 3.9 million subscribers in 18 countries within Africa, Asia, and Latin America. It also owns interests in European fixed-line networks through its 12% stake in Tele2. Other businesses include MIC Systems. Sweden's Kinnevik owns about 34% of the company. CONTACT: MILLICOM INTERNATIONAL CELLULAR 75, Route de Longwy L-8080 Bertrange, Luxembourg Phone: +352-27-759-101 Fax: +352-27-759-359 Home Page: http://www.millicom.com ========= S P A I N ========= CAJE DE AHORROS: Fitch Downgrades Individual Rating to 'B/C' ------------------------------------------------------------ Fitch Ratings downgraded Caja de Ahorros y Monte de Piedad del Circulo Catolico de Obreros de Burgos' Individual rating to 'B/C' from 'B', while affirming the bank's Short-term 'F2', Long-term 'A-' and Support '4' ratings. The Outlook on the Long-term rating remains stable. The rating agency says that the action reflects "concerns over the Spanish bank's increased exposure to market risk through equity securities in its investment portfolio." It also shows Fitch's concern on the effects of significant write-downs on these investments on Caja's earning capacity. Fitch warns that further deterioration in the bank's long-term profitability prospects will negatively affect long-term rating. Despite the negative connotation of the action, Fitch says that the ratings still reflect a stable retail deposit base for Spain's 36th largest bank in terms of total assets by the end of 2001. Caja de Ahorros provides loans to individuals (particularly mortgages), interbank lending and investments in fixed-income securities, all of which are mainly funded by retail deposits. =========== S W E D E N =========== LM ERICSSON: Fitch Assigns Senior Unsecured Rating of 'BB' ---------------------------------------------------------- Fitch Ratings assigned a Senior Unsecured rating of 'BB' with a negative outlook to Telefonaktiebolaget LM Ericsson. The international rating agency says that the action "reflects the extremely difficult demand conditions currently faced by Ericsson, the significant losses incurred over the past two years and sizeable cash restructuring costs the company has yet to absorb." Fitch warns that uncertain recovery in the telecommunications equipment provider's core mobile systems markets, in addition to a significant ongoing cash restructuring costs, will continue to affect Ericsson's operating cashflow and debt profile. It noted that along with a general downturn in the sector, Ericsson posted revenues, which went down 15% in 2001, and fell further 28% in the first nine months of the year. Orders from the company also went down by 42% for the first 9 months of the year. The rating agency also acknowledged Ericsson's progress in restructuring its cost base. It said that by September 2002 run- rate operating expenses were down to SEK52billion from SEK38 billion since the beginning of 2001. Ericsson indicated that its annualized revenue break-even point for the fourth quarter of 2003 is SEK120 billion. Fitch said that this represents a further 20% decline in current operating revenues, and confirms the management's commitment to revive the company in a significantly re-based revenue environment. Fitch acknowledges Ericsson's good liquidity (cash balances of SEK74bn, offsetting total debt of SEK69.2bn at September 2002) but warned that cost of restructuring and dunding of ongoing operating losses are likely to erode the company's strong cash position. The negative outlook of the rating reflects concerns that "the medium to longer-term debt maturities are dependent on continued success in meeting restructuring targets, without incurring greater cash costs than currently anticipated." LM ERICSSON: Issues Comments On First Rating by Fitch ----------------------------------------------------- As its first rating of Ericsson, Fitch Ratings has assigned a Senior Unsecured rating of 'BB' with a negative outlook. This rating is unsolicited and has no financial impact on Ericsson. Fitch's rating is based on public information and primarily reflects their view of the wireless infrastructure market. We believe their market view is similar to that of the other credit rating agencies. We reiterate our view that in the short-term the market is uncertain, but remain firmly optimistic in the longer perspective as the global number of subscribers and network traffic continues to grow. Our cost reductions are on track for returning the company to profit sometime next year and we continue to outperform the market in mobile systems and professional services. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. CONTACT: ERICSSON Investors Gary Pinkham, Vice President, Investor Relations Phone: +46 8 719 0858, +46 730 371 371 E-mail: investorrelations@ericsson.com INTENTIA INTERNATIONAL: To Appeal Tax Commission's Decision ----------------------------------------------------------- Tax authorities have denied Intentia International AB (publ.) a SEK 372 million deduction for losses incurred as a result of the liquidation of one of its subsidiaries during fiscal year 2001. Intentia will file an appeal at the county administrative court. Intentia is confident that the claim for deduction will be upheld by the higher court and that the company will not be required to write off deferred tax assets in the amount of SEK 104 million. The decision affects neither earnings nor cash flow for fiscal year 2002. According to the applicable accounting principles, fiscal losses carried forward are to be reported as "Deferred tax assets" under Financial Fixed Assets in the parent company and the group's balance sheets. The SEK 104 million referred to in this case is included in the amount reported for this item. About Intentia Intentia is one of the world's leading suppliers of collaboration solutions. Our vision is to become the leading global collaboration solutions vendor by supplying our customers with tomorrow's solutions today. Intentia offers a one-stop shop for all collaboration needs within numerous industry segments. We develop, implement and maintain our own solutions to produce the highest possible level of customer satisfaction. The Intentia Solution consists of applications covering customer relationship management (CRM), enterprise management (ENM), supply chain management (SCM), business performance measurement (BPM), e- business and value chain collaboration (VCC). Intentia has more than 3,200 employees and serves over 3,400 customers in the manufacturing, maintenance and distribution industries via a global network spanning some 40 countries. Intentia is a public company traded on the Stockholm Stock Exchange (XSSE) under the symbol INT B. CONTACT: Intentia International AB Hakan Gyrulf, VP and CFO Phone: +46-8-5552 5825 Fax: +46-8-5552 5999 Cell phone: +46-733-27 5825 E-Mail: hakan.gyrulf@intentia.se Thomas Ahlerup, Head of Corporate and IR Intentia International AB Phone: + 46 8 5552 5766 Fax: + 46 8 5552 5999 Cell phone: + 46 733 27 5766 E-Mail: thomas.ahlerup@intentia.se SONG NETWORKS: Plan of Composition Becomes Irrevocable ------------------------------------------------------ Song Networks Holding AB (Stockholm:SONW) (Other OTC:SONWF) announced that the confirmation of the plan of composition (Akkoord) for its wholly-owned subsidiary, Song Networks N.V., issued by the District Court of Amsterdam on December 4, 2002, became irrevocable on December 13, 2002. All conditions for the issuances of shares and convertible notes required for Song Networks' financial restructuring, decided by shareholders at the extraordinary shareholders' meeting held on November 11, 2002, have now been fulfilled. About Song Networks (Stockholm:SONW) (Other OTC:SONWF), formerly Tele1 Europe, Song Networks is a data and telecommunications operator with activities in Sweden, Finland, Norway and Denmark. The company's business concept is to offer the best broadband solution for data communication, Internet and voice to businesses in the Nordic region. This means that Song Networks supplies communication solutions that are attractively customized for each corporate customer. Song Networks is currently the only pan Nordic operator investing in local access networks with broadband capacity. The company has built local access networks in the largest cities in the Nordic region. The access networks, which are linked by a long-distance network is one of the fastest data and Internet super-highways in Europe, with an initial capacity for customers of up to one gigabit. The company was founded in 1995 in Sweden and have approximately 975 employees per September 30. The head office is located in Stockholm and there are an additional 34 offices located in the Nordic region. www.songnetworks.net CONTACT: Song Networks Holding AB Svardvagen 19 SE-182 15 Danderyd, Sweden Phone: +46-8-563-100-00 Fax: +46-8-563-101-01 Homepage: http://www.songnetworks.net Contacts: Tomas Franzen, Chief Executive Officer Phone: +46 8 5631 0111 Mobile: +46 701 810 111 E-mail: tomas.franzen@songnetworks.net or Ari-Jussi Knaapila, Chief Operations Officer Liia Nou, Chief Financial Officer SONG NETWORKS: Rights Issuance Fully Guaranteed ----------------------------------------------- Song Networks Holding AB (Stockholm:SONW) (Other OTC:SONWF) announces that the company's planned rights issuance now is, according to plan, fully guaranteed. An additional piece of the ongoing restructuring of the Song Networks group is now in place. The planned rights issuance is now fully guaranteed. A consortium of Stena Adactum AB, Dunross & Co AB and Adolf Lundin provide the guarantee. "I have all the time been convinced that the share issuance would be fully guaranteed, but it feels good to have the guarantee in place. I see this as an evidence of the investors' confidence in the new Song Networks," said Tomas Franzen, Chief Executive Officer Song Networks Holding AB. Song Networks is a data and telecommunications operator with activities in Sweden, Finland, Norway and Denmark. The company's business concept is to offer the best broadband solution for data communication, Internet and voice to businesses in the Nordic region. This means that Song Networks supplies communication solutions that are attractively customized for each corporate customer. Song Networks is currently the only pan Nordic operator investing in local access networks with broadband capacity. The company has built local access networks in the largest cities in the Nordic region. The access networks, which are linked by a long-distance network is one of the fastest data and internet super-highways in Europe, with an initial capacity for customers of up to one gigabit. The company was founded in 1995 in Sweden and has approximately 975 employees per 30 September. The head office is located in Stockholm and there are an additional 34 offices located in the Nordic region. For further information, please visit www.songnetworks.net CONTACT: SONG NETWORKS HOLDING AB Tomas Franzen, Chief Executive Officer Phone: +46 8 5631 0111 Mobile: +46 701 810 111 E-mail: tomas.franzen@songnetworks.net SONG NETWORKS: S&P Lowers Senior Unsecured Debt Ratings to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services downgraded the senior unsecured debt ratings on three issues of Song Networks from 'C' to 'D' following confirmation that the composition proceedings for the telecommunications operator is irrevocable. The rating agency considered the action equivalent to a default. Simon Redmond, credit analyst at S&P, explained that the proceedings aim to cancel all of Song's outstanding debt and associated interest expense "while introducing fresh capital and network assets." The restructuring means "that bondholders will receive shares in the company in exchange for the cancellation of all of the bonds," he added. The Swedish company's corporate credit rating and senior unsecured debt rating were meanwhile affirmed at 'D' where they were placed in August following Song Network's default on interest coupon due August 1 and on its 12.375% senior notes. Song Networks (formerly Tele1 Europe) operates a pan-Nordic fiber-optic network providing voice and data services. Its customers are connected to the company's backbone network through local access loops in the region's largest urban centers. Song Networks has sold its consulting services unit, which provides management of clients' telecom systems, and has outsourced its mobile resales business. An agreement to acquire Telenor's business services unit in exchange for a stake in the company, which was part of Song Networks' financial restructuring, has been scrapped. ===================== S W I T Z E R L A N D ===================== ABB LTD.: Signs US$1.5 Billion Credit Facility With Banks --------------------------------------------------------- ABB, the leading power and automation technology group, said it has signed a US$ 1.5 billion credit facility agreement with a group of 20 banks, covering the company's liquidity needs for 2003 and 2004. The facility is secured by a package of ABB assets, including the Oil, Gas and Petrochemicals division, which is earmarked for divestment in 2003. "The agreement provides sufficient liquidity for 2003 and 2004, and allows us to implement our program to lower our cost base, focus on our core businesses, and achieve the best value from our divestments," said Peter Voser, chief financial officer. The agreement is a one-year revolving credit facility for US$ 1.5 billion with a further one-year termout feature. The term-out gives ABB the option to retain up to US$ 750 million in borrowings under the facility, repayable in 2004. The arranging banks and bookrunners are Barclays Capital, Citigroup, Credit Suisse First Boston and HypoVereinsbank. The new credit facility replaces an existing facility, which expired on December 17, 2002. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in more than 100 countries and employs about 146,000 people. CREDIT SUISSE: CSAM Announces Organizational Changes ---------------------------------------------------- Credit Suisse Asset Management (CSAM) has announced several organizational changes designed to strengthen its global platform. The changes include the naming of a new Global Executive Committee, the reduction of the number of operating regions from five to three along with key appointments, and the identification of key goals and objectives. The regions include the Americas, Europe and Asia Pacific. The new European region combines the Firm's operations in Europe and Switzerland and is headed by Henry Wegmann, the former CEO of CSAM Switzerland. Joseph Gallagher, formerly CSAM's CFO and CEO of Europe (ex Switzerland) will now head the Americas. Andrew McKinnon will now head the Asia Pacific region, comprised of Australia, Japan and non-Japan Asia. He will retain responsibility for Australia, and Toshio Fukuda will continue to manage the Japan business. CSAM also announced the creation of a Vice Chairman position responsible for Client Relations to be held by Robert Parker, Global Head of Institutional Marketing. Larry Smith, who has, in addition to his responsibility as Global Chief Investment Officer, been acting as interim CEO of the Americas, will now be able to focus his attention on his role as Global CIO. He will work in tandem with Greg Sawers, Global Head of Research, to focus on investment performance and to highlight the Firm's global investment capabilities. Mr. Sawers recently joined CSAM from Sanford Bernstein. The Firm announced a number of specific goals and objectives as part of the organizational changes, including consistent performance, improved profitability and fostering a culture of cooperation. "I am very excited about this new structure. Our objective is to create a strong, integrated global asset management Firm that delivers consistent investment performance for our clients, opportunities for our employees and best in class returns for shareholders. These changes will enable CSAM to develop a strong global platform and leverage its cross-border strengths and relationships," said Jeffrey Peek, Vice Chairman of Credit Suisse First Boston (CSFB) and Head of CSFB's Financial Services Division, which includes CSAM. Mr. Peek also announced the formation of a new Global Executive Committee that will be comprised of: -- Jeffrey Peek - Vice Chairman, CSFB and Head of the Financial Services Division -- Henry Wegmann - Head of CSAM Europe -- Joseph Gallagher - Head of CSAM Americas -- Andrew McKinnon - Head of CSAM Asia Pacific -- Laurence Smith - CSAM Global Chief Investment Officer -- Greg Sawers - CSAM Global Head of Research --Robert Parker - Vice Chairman, Client Relations and Global Head of CSAM Institutional Marketing "I am confident that the changes announced today will strengthen CSAM. They highlight our continued commitment to our clients and to improving our investment performance, and they give us the platform to help deliver on these commitments," said Mr Peek. The appointments are effective immediately. Credit Suisse Asset Management is the institutional and mutual fund asset management arm of Credit Suisse First Boston, part of the Credit Suisse Group, one of the world's largest financial organizations with approximately USD 819.6 billion in assets under management. Credit Suisse First Boston (CSFB) is a leading global investment bank serving institutional, corporate, government and individual clients. CSFB's businesses include securities underwriting, sales and trading, investment banking, private equity, financial advisory services, investment research, venture capital, correspondent brokerage services and asset management. CSFB operates in 77 locations in 36 countries across six continents. The Firm is a business unit of the Zurich-based Credit Suisse Group, a leading global financial services company. For more information on Credit Suisse First Boston, please visit our Web site at www.csfb.com As of September 30, 2002, Credit Suisse Asset Management employed 2,270 people worldwide and had global assets under management of approximately USD 284.3 billion. Please note that this is not an offer for advisory services by Credit Suisse Asset Management. For more information on Credit Suisse Asset Management, please visit our Web site at www.csam.com CONTACT: Credit Suisse Asset Management Suzanne Fleming, Corporate Communications Phone: +1 212 875 3957/+1 212 325 5471 =========================== U N I T E D K I N G D O M =========================== AVECIA GROUP: Moody's Lowers Ratings, Assigns Negative Outlook -------------------------------------------------------------- Moody's Investors Service downgraded the ratings on Avecia Group debt securities from B3 to Caa1, and senior implied rating from B1 to B2. It also lowered the company's bank debt securities from Ba3 to B1 and the preferred stock rating from Caa1 to Caa2. The outlook on all ratings is negative. Ratings affected are: - The rating for the US$ 540 million in senior notes of Avecia Group PLC lowered from B3 to Caa1 - The senior implied rating for Avecia Group PLC lowered from B1 to B2 - The rating assigned to the bank debt facilities for Avecia Investments Ltd lowered from Ba3 to B1 - The senior unsecured issuer rating for Avecia Group PLC lowered from B3 to Caa1 - The preferred stock rating on the US$45m PIK Preference shares for Avecia Group PLC lowered from Caa1 to Caa2. The action, which concluded the rating agency's review in November, reflects Moody's concerns about the weak cash flow generation of Avecia relative to its debt level. The downgrade also reflects Moody's expectations that Avecia's credit metrics will further deteriorate in the coming twelve months as a result of elevated CAPEX, limited operating cash flow generation and charges arising from restructuring. Moody's noted that the group's leverage ratio was 9.3x on a Net Debt/(EBITDA-CAPEX) basis for the last twelve months ending September 30, 2002. And that debt/cashflow leverage and interest coverage metrics are likely to remain under pressure in the coming year. Avecia's difficulties are expected to stem from a general weak economic environment, loss of business and cash flows, and restructuring cash charges. The rating agency particularly cites the US launch delay of a principal customer's drug as reason for loss of business and cash flows. The rating agency also predicts the group's CAPEX spend to be significant in anticipation of further investments they have to make in their biotechnology plant in Billingham. Moody's also expresses concern on the continuous erosion of the group's EBITDA margins, which went down 20% in 2000 to 16% in 2001 and 9% in the first 9 months of the year. Yet, Moody's acknowledges the group's adequate liquidity and its efforts to counter lower demand expected in the fine chemicals. Avecia has GBP85 million reserve as of September 30, 2002. This, however, Moody's expect to be reduced as a result of negative free cash flow generation, and of a compulsory debt amortization payments of GBP24 million in the coming year. The group's bond was assigned a Caa1 rating to reflect structural subordination of the notes to the senior secured creditors and to the other liabilities of the operating companies. The negative outlook is in anticipation of a challenging market outlook for some of the group's businesses, the tight headroom under the bank covenants and a more modest liquidity cushion for 2003. Avecia is a holding company for a diversified specialty chemicals group. BAE SYSTEMS: Pension at Risk Without Government Action ------------------------------------------------------ As the Government publishes the green paper on the pension crisis today, Amicus expressed fears for the pension scheme of the giant defense manufacturer BAE Systems. The company has been reviewing the staff pension scheme and union representatives believe it's a done deal. They fear the company has already decided to close the scheme either to new starters or completely replacing it with a more risky money purchase scheme. Amicus Joint General Secretary Derek Simpson said, "Closing this scheme will have a devastating effect on thousands of families. If the government had changed the law to protect pension benefit in the same way as pay is protected BAE Systems would not be seeking to make savings out of their staff's retirement income." Amicus has been seeking action from Ministers to protect pension schemes including, pensions being brought within the scope of contracts of employment, established as being covered by trade union recognition and negotiating procedures and protected in TUPE business transfers. Amicus hopes today's green paper will address the lack of legal protection for employee's pensions and suggest employers be compelled to make a decent level of contribution to staff pensions. Specifically Amicus wants to see the green paper include, pensions to be afforded the status of pay under the employment contract, full consultation rights for pension scheme members, mandatory minimum employer pension contribution levels in the region of 10% and the establishment of a central discontinuance fund to compensate pension scheme members in the event of employer insolvency. Amicus Joint General Derek Simpson said: Our members will be angry if the government does not use the green paper as an opportunity to signal to employers that they have a moral obligation to contribute to the retirement income of working people and to force them to keep the pension promises they have made to their staff. Millions of working people are relying on the government to end the crisis effecting pension provision and they don't want to see a smoke screen created to help employers wriggle out of their responsibility of providing decent retirement income. Raising the retirement age and encouragement for individuals to save more on top of their pension scheme will not be solutions they're diversions. BUSINESS A.M.: Operation to Close by the End of the Week -------------------------------------------------------- A senior executive from Bonnier, the Swedish publishing group that founded Business A.M., has confirmed that the newspaper will close by the end of this week and all of the 125 staff would be made redundant from Friday, The Scotsman says. The publication will resume operation in the middle of January, but it will be a "slimmed-down" weekly business paper managed by only between 35 and 40 people. Uncorroborated information point out that the new owner will be Scottish publisher Angus MacDonald, whose company owns the London-based weekly business title Financial News. A spokesman for Business A.M. confirmed that talks were at "an advanced stage." Mr. MacDonald has outlined his vision for the title, the Scotsman reported, noting that the re-launched paper will be priced between 95p-125p and will look similar in size and format, but with an aim of recording GBP40,000 of advertising sales each week and distributing 20,000 copies. Mr. MacDonald, while hoping that many of the staff will remain, told the staff of the reduction in company benefits such as cars, private healthcare and pensions. He also said that he believed many of the paper's staff were overpaid. Business A.M.'s troubles started when Swedish owner Bonnier said in October it would not continue funding the paper on its own. It was looking for a partner that would cover the estimated GBP5 million to GBP10 million of additional investment. But the media group failed partly because the search coincided with the emergence of SMG's Glasgow-based Herald newspapers. In another TCR-EUR issue, Bonnier was indicated to have intended to achieve a circulation of 19,000 copies a day by October 2002 with break even point coming in 2005 with a circulation of 35,000. But circulation reached only about 11,200 for most of 2001. Slump in advertising also compounded the trouble. CONTACT: BONNIER Torsgatan 21 113 90 Stockholm, Sweden Phone: +46-8-736-40-00 Fax: +46-8-728-00-28 Home Page: http://www.bonnier.se COLT TELECOM: Role of KMPG Questioned in Suit With Highberry ------------------------------------------------------------ The role of accountancy firm KPMG in Colt Telecom came under scrutiny while the business communication services provider defends itself from a call of Highberry Ltd. to shut down. Richard Sheldon, QC, who represented Colt, deemed KPMG's attestation of the potential insolvency of Colt and its bid to be the company's administrator "quite inappropriate," says the Financial Times. Highberry Limited, part of Elliott Associates, claimed that Colt will not be able to repay GBP1.1 billion (US$1.7 billion) of bonds that mature in 2005, and said it had lost faith in the company's balance sheet and forecasts. Highberry relied on KPMG's report that claimed Colt's liabilities exceed its assets by GBP48 million, according to Bloomberg. KPMG prepared the report using FRS11, the accounting standard used to ensure a company's assets are correctly valued on the balance sheet. Justice Robert Jacob, who is due to give his decision on Friday, also noticed a potential conflict of interest as KPMG had also done tax work for the British company: "In a contested administration, the person giving expert evidence shouldn't have an interest in the result," Judge Jacob said. Further, according to the judge, KMPG partner Richard Heis, who prepared the report, was not qualified to do the job because he has no previous experience conducting an FRS11 investigation. GLAXOSMITHKLINE: Receives Second Approvable Letter for Advair ------------------------------------------------------------- The U.S. Food and Drug Administration issued a second approvable letter to GlaxoSmithKline in relation to Advair, its asthma inhaler considered for treatment of chronic obstructive pulmonary disease or smokers' cough. This raises the possibility that GSK may need to conduct further clinical trials, delaying the launch of Advair into a lucrative new market, according to the Scotsman. Advair recorded sales of GBP850 (US$1.4 billion) last year, and is deemed by ABN Amro, GSK's brokers, to potentially raise GBP4 billion each year in the succeeding years. In March, the FDA confirmed the potency of Advair in treating smoker's cough, but delayed full approval of the drug pending resolution of certain issues. The report says FDA is understood to have worries over the long-term use of steroids, which is the active ingredient in Advair, and the effect on bone density in older people, who are the primary market for smokers' cough. GSK, which plans to resolve the issue early next year, considers it too early yet to conclude that more trials would be needed to obtain full approval for the drug. Earlier, GSK's announcement that it has no plans of updating investors on progress in research and development raised serious questions about the company's future. Worries on the quality of GSK's pipeline hit the shares of the pharmaceutical firm. Effectively, shares in the group fell 2.6 per cent, or 31p, to GBP11.62 in the early morning trade in London on Tuesday. CONTACT: GLAXOSMITHKLINE 980 Great West Rd. Brentford, Middlesex TW8 9GS, United Kingdom Phone: +44-20 8047 5000 Fax: +44-20 8047 7807 Home Page: http://www.gsk.com Contact: Sir Christopher Hogg, Chairman Jean-Pierre Garnier, CEO and Director John Coombe, CFO and Director MARCONI PLC: Faces Lawsuit Filed by Paris-based Company ------------------------------------------------------- Cash-strapped phone-equipment maker, Marconi Plc, is currently working to resolve a suit brought by phone-equipment maker Alstrom SA to the High Court in London. The world's second-largest maker of trains is suing the British company for alleged misinformation over the cost of maintaining equipment sold by the Marconi. In a court filing Alstrom claimed that Marconi misrepresented the expense of repairing communications equipment supplied for Alstrom trains used on London's subway system. The company is also suing Marconi for breach of contract. A Marconi spokesman told Bloomberg that the company is confident it can reach a "satisfactory settlement" for the charge. Alstrom spokeman, Malcom Cowling, on the other hand, failed to respond to the query of the news agency. Marconi, which has lost 99% of its market value after embarking on a US$8 billion buying spree, recently issued the update of its financial restructuring. It agreed to hand the company to creditors to cancel more than GBP4 billion of debt. CONTACT: MARCONI PLC 1 Bruton St. London W1J 6AQ, United Kingdom Phone: +44-20-7493-8484 Fax: +44-20-7493-1974 Homepage: http://www.marconi.com Contacts: Derek C. Bonham, Chairman M. W. J. (Mike) Parton, CEO Steve Hare, Finance Director ALSTOM 25, avenue Kleber 75116 Paris Cedex 16, France Phone: +33-147552000 Fax: +33-147552861 Homepage: http://www.alstom.com Contacts: Pierre Bilger, Chairman and CEO Patrick Kron, Chief Executive Officer Philippe Jaffr,, CFO and Advisor to the Chairman R. TERLEY: Pepper and Gray Appointed Joint Interim Managers ----------------------------------------------------------- Andrew Pepper and Fraser Gray of Kroll Buchler Phillips have been appointed Joint Interim Managers to R. Terley Limited, which currently operates 63 out of town stores under the 'Texstyle world' brand. This is the first step towards placing the company into administration. The company suffered significant trading losses in 2000 and 2001 following an expansion program throughout England and Wales. These losses led to cashflow difficulties, which were not significantly improved by a financial restructuring in September 2002. Although trading performance in some of the stores in Scotland and Northern Ireland is strong, trading losses from previous years and from the stores in England and Wales have crippled the company financially. A new Chief Finance Officer was appointed on 21 October 2002 and Management informed the company's bankers during November 2002 of an GBP8 million creditor "overhang" which could not be met from projected cashflows. Without new investment or additional borrowings, the company would be insolvent. The company has not prepared management accounts since 28th July 2002 when a first quarter loss of GBP1.5 million was reported. In July 2002 the company appointed Hilco U.K., the retail restructuring specialists, to assist with the exit from 24 unprofitable stores in England, Wales and the Republic of Ireland. In recent weeks the Directors again approached Hilco U.K. with a view to Hilco assisting in a further restructuring programme after it became clear that it was likely a receiver would be appointed. Ernst & Young were appointed receivers to Texstyle world Limited, the investment holding company, on 3rd December 2002. A subsidiary of Hilco U.K. acquired the entire issued share capital of R Terley Limited from the receiver on 4th December 2002. Paul McGowan, a Partner in Hilco, said: "It is never easy for a company to appoint administrators at this time of year but it is clear that the appointment is essential for the survival of the Texstyle world business and the maintenance of the maximum number of stores and jobs. That is our target. The appointment of a receiver would have had a disastrous impact on the business. " The company holds a number of deposits paid in recent months by its customers. Although these monies had been used to fund the company's working capital, Hilco U.K. has agreed to help the Administrator fulfil all orders where possible. Hilco has also agreed to underwrite GBP4.6m of standby letters of credit, which are held by some of the major creditors of the company, and to ensure that all employees are paid as normal on 27th December 2002. It is planned that the company's stores will continue to trade whilst the restructuring takes place. Paul Taylor of Hilco said "There is a good core business which has great potential. With Texstyle world's strong brand awareness and customer loyalty we hope that a new Texstyle world with a stronger financial base will emerge from the administration". In addition to its work with Texstyle world, Hilco U.K. has in recent years been involved in retail restructuring projects for companies such as Beatties of London and Uptons Plc where a total of almost 200 jobs were saved. In each instance, the core profitable parts of the business continue to trade successfully under new ownership. In March this year, Hilco U.K. funded the successful management buyout of the Zebco Europe fishing tackle business in Germany, France and the U.K. CONTACT: Paul McGowan Hilco U.K. Phone: 07967 204 618 Paul Taylor Hilco U.K. Phone: 07710 024 400 ************ S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam, Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, 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 * * *