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            T R O U B L E D   C O M P A N Y   R E P O R T E R

                             E U R O P E

                 Wednesday, February 5, 2003, Vol. 4, No. 25


                              Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Hiring Smith Katzenstein as Conflicts Counsel

* F R A N C E *

ARCELOR: Labor Unions to Protest Plant Closure in Liege
PEGUFORM FRANCE: Decoma Bids to Acquire Fascia Operations
VIVENDI UNIVERSAL: Assets Subject to Acquisition Offers

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Lone Star Remains in the Bidding
BANKGESESLLCHAFT BERLIN: Obtains Potential Bidder for Subsidiary
BERTELSMANN AG: Publishing Unit Attracts More Than 12 Offers
DEUTSCHE TELEKOM: Publishers Eye Yellow Pages Business
GERLING-KONZERN: Standard & Poor's Cuts Ratings to 'BB'

* L U X E M B O U R G *

VANTICO GROUP: Reaches Agreement on Proposed Debt for Equity Swap
VANTICO GROUP: Defers Interest Payment Due February 1, 2003
VANTICO GROUP: S&P Lowers Senior Unsecured Debt Ratings

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

GETRONICS N.V.: Company Profile

* N O R W A Y *

PETROLEUM GEO-SERVICES: Fitch Affirms Unsecured Debt at 'C'

* P O L A N D *

DAEWOO-FSO: Faces Pressure From MG Rover to Finalize Deal

* R U S S I A *

IRKUTSKENERGO: S&P Raised Long-Term Issuer Credit Ratings
MOTOVILIHA PLANTS: To Undergo Major Restructuring This Year
SBERBANK: Fitch Ratings Upgrades Individual Rating to 'C/D'

* S P A I N *

AVANZIT SA: Dissolves Telsen Board of Directors Before Sale
LM ERICSSON: Posts Positive Cash Flow, Continued Cost Reductions

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

CREDIT SUISSE: CSFB Places Quattrone on Administrative Leave

* U N I T E D   K I N G D O M *

BNFL: Chief Executive to Leave Post Later This Year
BRITISH ENERGY: Rumors of Impending Rescue Buoys Share Price
HENDERSON GEARED: Proposes Winding Up and Reconstruction
L GARDNER: London Bourse Launches Investigation of Ex-Directors
SCOTTISH & NEWCASTLE: Incurs New Costs of GBP15 MM
SILENTNIGHT HOLDINGS: Issues Fifth Profit Warning Within a Year
TEXSTYLE WORLD: Asks Internacionale Chairman to Simplify Bid
THISTLE HOTELS: Says No Bank Investigation, No Outstanding Loans


=============
B E L G I U M
=============


LERNOUT & HAUSPIE: Hiring Smith Katzenstein as Conflicts Counsel
----------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. seeks Judge Wizmur's
authority to employ Smith Katzenstein & Furlow LLP, nunc pro
tunc to November 26, 2002, to act as the estate's counsel only
for the commencement and prosecution of avoidance actions in
which L&H NV's bankruptcy counsel cannot act for the estate due
to ethical conflicts of interest.

SKF will charge the Debtors on an hourly basis in accordance
with its standard hourly rates in effect on the date the
services are rendered. The SKF attorneys who will primarily
represent L&H NV, and their standard hourly rates, are:

        Professional            Position      Hourly Rate
        ------------            --------      -----------
        Kathleen M. Miller      Partner          $250
        Roger Anderson          Associate         175
        Joelle E. Polesky       Associate         175
        Deborah C. Sellis       Associate         175
        Yaprak Soysal           Paralegal          90
        Ellen Sebastiani        Paralegal          90
        Marianne M. Payne       Paralegal          90

These standard hourly rates are subject to adjustment generally
on January 1 of each year.

Kathleen M. Miller, a principal of SKF, tells Judge Wizmur that
the firm has not represented the Debtor, its equity security
holders, or any other parties-in-interest, or their attorneys,
in any matter relating to the bankruptcy estate, and the firm
does not hold or represent any interest adverse to L&H NV.  SKF
is, therefore, a "disinterested person" as that phrase is
defined in the Bankruptcy Code.

However, Ms. Miller discloses that SKF represents a creditor in
the L&H Holdings (USA) case.  That creditor, Buhl Data, has a
claim against Holdings and has filed an administrative claim
against Holdings, which is the subject of Holdings' Fourth
Omnibus Objection.  SKF also represented the Pension Benefit
Guaranty Corporation in the Dictaphone bankruptcy.  PBGC
withdrew its claim against Dictaphone, and SKF has not
represented PBGC in any matter related to L&H NV since that
time.

Ms. Miller further relates that SKF served as local counsel to a
shareholder of Holdings who brought an appraisal action in the
Chancery Court of the State of Delaware prior to the Petition
Date, at which time this action was stayed.  SKF has not
provided further representation to that creditor in the Holdings
Chapter 11 case. (L&H/Dictaphone Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


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


ARCELOR: Labor Unions to Protest Plant Closure in Liege
-------------------------------------------------------
Labor unions are planning to stage a 24-hour strike and walkout
on Thursday to protest Arcelor's move to stop investment at its
Cockerill-Sambre plant in Liege.

The strike, understood to be the first protest action since
Arcelor announced its plan to freeze investment at four of its
least profitable blast furnaces on January 24, will start at 2100
GMT.

Nico Cuwe, representative for the socialist FGTB union told Dow
Jones this was the first of many strikes to come.

The closures are part of the radical restructuring of Arcelor's
industrial plant in order to "guarantee its competitive
position," the company earlier said.  The measure is expected to
eventually result to the shut down of 8 million metric tons in
steel producing capacity by 2010.

According to Arcelor chairman Guy Dolle, the planned closure in
Liege will affect about 1,700 of its 4,300 workforce.

Arcelor forsees that the restructuring is also likely to include
its facilities in Breme, Germany and Ekostahl, Germany, as well
as Florange, France.

The strike affects all metal workers in the region of Liege,
which amounts to 6,000 people, according to the trade unions.

Arcelor was formed from the merger of Usinor of France, Arbed of
Luxembourg and Aceralia of Spain.


PEGUFORM FRANCE: Decoma Bids to Acquire Fascia Operations
----------------------------------------------------------
Decoma International Inc. announced that it has submitted an
initial bid to the Official Receivers of Peguform France S.A.S.
to purchase the fascia manufacturing business and fixed and
intangible assets of Peguform located in France for an aggregate
asset purchase price of Euro 6 million. In addition to the above
asset purchase price, Decoma's bid provides for the purchase of
Peguform's work-in-progress, raw materials and finished goods
inventory, for an amount not to exceed Euro 4 million. Peguform
operates four manufacturing facilities in France and employs
approximately 1,350 employees. Peguform had sales of
approximately Euro 160 million for the year ending December 31,
2002 and its principal customers are PSA and Renault.

Decoma anticipates that there will be a number of competing
bidders for these assets during the course of the insolvency
proceedings and its offer is subject to a number of conditions,
including the completion of final due diligence and regulatory
and board approvals. As such, Decoma is unable to assess at this
time the likelihood of the success of its bid.

Decoma designs, engineers and manufactures automotive exterior
components and systems which include fascias (bumpers), front and
rear end modules, plastic body panels, roof modules, exterior
trim components, sealing and greenhouse systems and lighting
components for cars and light trucks (including sport utility
vehicles and mini-vans). Decoma has approximately 14,000
employees in 41 manufacturing, engineering and product
development facilities in Canada, the United States, Mexico,
Germany, Belgium, England, Japan, France and the Czech Republic.

CONTACT:  DECOMA
          S. Randall Smallbone, EVP, Finance and CFO
          Phone: +1 (905) 669-2888
                 +1 (905) 760-3203
          Home Page: http://www.decoma.com/


VIVENDI UNIVERSAL: Assets Subject to Acquisition Offers
-------------------------------------------------------
Investors at Vivendi Universal's private equity business
Viventures II attempted to take control of the equity fund last
week, while billionaire oilman Martin Davis offered the company
EUR19 billion for its entertainment assets.

The move to take over the equity fund managed by Vivendi came
after new Vivendi CEO Jean-Rene Fourtou decided to stop investing
in the fund last August.  Vivendi continues to maintain 100%
control over the fund's management structure, although it no
longer maintains financial ties with the investment.

Vivendi Universal rejected outright the proposal, according to
the Financial Times.

Mr. Davis', meanwhile, is trying to convince Vivendi to part with
its entertainment assets in exchange for EUR14 billion in cash
and the assumption of a EUR5 billion of the company's debts.

According to The Guardian, Mr. Fourtou and Mr. Davis met secretly
last week in Paris.  It was known that Vivendi rejected Mr.
Davis' US$20 billion bid for the assets--which include Universal
Studios and Universal Music--late last year.

Mr. Fourtou has shed businesses worth EUR8.2 billion (US$8.9
billion), including most of Vivendi's water and waste business
and its publishing unit.  But it is believed that he still needs
to sell at least EUR5 billion of assets this year to meet targets
in reducing the company's debt burden, which was EUR13 billion by
the end of 2002.


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


BANKGESELLSCHAFT BERLIN: Lone Star Remains in the Bidding
---------------------------------------------------------
U.S. investment group Lone Star denied it has withdrawn its bid
for the struggling German public-sector bank Bankgesellschaft
Berlin, although it admitted calling for additional information
regarding risks before submitting a firm bid.

Bankgesellschaft Berlin, with a market value currently estimated
at around EUR 1.6 billion, has set EUR 1.8 billion as a maximum
bid.

However, this offer might be improved if the German Land of
Berlin, which holds 81% of the BGB, agrees to cover risks over
and above those already assumed.

Moreover, Berlin's regional government has signaled that a higher
price may be obtained if restructuring plans for BGB are
successful.

Other bidders include the USconsortium US consortium BGB Capital
Partners, which is formed by US investment banker Christopher
Flowers, and venture capital company Texas Pacific group.

The ailing German bank has been in search for a new investor to
help it through its financial difficulties since October last
year.  It denied during that time speculations of its insolvency.

Berlin is selling the bank to reduce its huge debt, which is
estimated close to EUR50 billion.

CONTACT:  BANKGESELLSCHAFT BERLIN AG
          Alexanderplatz 2, Postfach 110801
          D-10178 Berlin, Germany
          Phone: +49-30-245-500
          Fax: +49-30-245-509
          Homepage: http://www.bankgesellschaft.de
          Contacts: Dieter Feddersen, Chairman, Supervisory Board
                    Norbert Pawlowski, Managing Director


BANKGESESLLCHAFT BERLIN: Obtains Potential Bidder for Subsidiary
----------------------------------------------------------------
Mittelbrandenburgische Sparkasse (MBS) may post a bid for
Berliner Sparkasse, the savings bank subsidiary of struggling
German public-sector bank Bankgersesllchaft Berlin (BGB), says
Frankfurter Allgemeine Zeitung.

The German savings bank based in the region of Brandenburg said
it might form a consortium together with a savings bank based in
the west of the country and the eastern German savings banks'
association OSGV, in order to bid if Berlin's regional government
rejects offers from private investors.

It also plans to invite German public-sector regional bank
Norddeutsche Landesbank to join the consortium in order to take
over the large customer and capital market business of Berliner
Sparkasse.

The management of Mittelbrandenburgische Sparkasse believes the
formation of one regional savings bank for the Berlin-randenburg
region would produce extensive synergies.

But in case investment company Lone Star acquires BGB, MBS plans
to approach the U.S. company over the possibility of taking over
the large customer and capital market business of Berliner
Spakasse.


BERTELSMANN AG: Publishing Unit Attracts More Than 12 Offers
------------------------------------------------------------
Debt-laden German media giant Bertelsmann said its science and
business publishing unit, BertelsmannSpringer, attracted more
than 12 offers from a pool of international bidders.

The company said it is now trying to decide which of these
bidders, which includes industry rivals and financial investors,
will make it to the final list who will be allowed to conduct a
due diligence on the business.

Bertelsmann spokesman Markus Payer said Bertelsmann expects to
complete the sale by the end of the quarter, but it could be
later.  He declined to name the bidders or discuss a price,
according to Dow Jones.

Bertelsmann is selling the division, which it considers non-core,
in order to lower debt, speculated at around EUR4 billion at the
end of 2002.

AFX News last week reported Bertelsmann AG chairman Gunter
Thielen ruling out large acquisitions in light of its debt level.

The company's debt ballooned after Zomba exercized a 'put' option
worth US$3 billion for Bertelsmann to acquire the remaining
shares in Zomba last year.

In June it dropped a planned EUR1 billion bond sale due to market
conditions.



DEUTSCHE TELEKOM: Publishers Eye Yellow Pages Business
------------------------------------------------------
The publishers of Deutsche Telekom's yellow pages are interested
in buying the telecommunications group's directories business,
DeTeMedien, the Financial Times said.

Germany's largest telecommunications group, which is currently
divesting assets to trim down debts, confirmed it was considering
selling the yellow-pages business to help pare down borrowings.
DeteMedien is expected to raise up to EUR1 billion.

The publishers form a consortium of 100 independent companies,
with each one having a contract with the telecoms group.  As
such, they gain a formidable position as rivals would need to
renegotiate with each one of them.  DeTeMedien controls the
content and has agreements to pass the relevant information on to
each publisher.

Earlier, Deutsche Telekom confirms it has plans of unloading
other assets in order to meet a target of cutting debt to between
EUR49.5 billion and EUR52.3 billion by the end of the year.

In addition to DeTeMedien, the company says it is mulling on
unloading its 40% stake in Russian mobile operator MTS (Mobile
Tele System), and its antenna business.

MTS posted a net profit of US$84.3 million in the third quarter
on sales of EUR388.5 million.

CONTACT:  DEUTSCHE TELEKOM
          Friedrich-Ebert-Allee 140
          53113 Bonn, Germany
          Phone: +49-228-181-0
          Fax: +49-228-181-8872
          Home Page: http://www.telekom.de
          Contact:
          Hans-Dietrich Winkhaus, Chairman, Supervisory Board
          Kai-Uwe Ricke, Chairman, Management Board, and CEO


GERLING-KONZERN: Standard & Poor's Cuts Ratings to 'BB'
-------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its
counterparty credit and insurer financial strength ratings on
Gerling-Konzern Globale Ruckversicherungs-AG (GKG) and its
guaranteed subsidiaries to 'BB' from 'BBB'.

The ratings on GKG's operating subsidiary in the U.S., Gerling
Global Re Corp. of America (which is not guaranteed) were also
lowered to 'BB' from 'BBB'. Simultaneously, all the ratings were
removed from CreditWatch. The counterparty credit rating (CCR) on
Constitution Holding Inc. was also lowered to 'B' from 'BBB-'.
The outlook on all the CCRs is negative. All the ratings were
withdrawn at the request of the company (see list below).

At the same time, Standard & Poor's lowered to 'CCC' from 'BB+'
its long-term debt rating on the EUR220 million subordinated
notes issued by Gerling Global Finance Alpha B.V. and guaranteed
by GKG, and lowered to 'CC' from 'BB' the rating on the $85
million of preferred stock issued by Constitution Capital Trust I
and guaranteed by Constitution Holding Inc. These ratings were
also removed from CreditWatch, but, in accordance with normal
practice, will remain under surveillance.

"Management's decision to withdraw the ratings with immediate
effect means that Standard & Poor's will not be able to perform
the additional depth of analysis that it had planned in order to
gain sufficient comfort that the run-off of GKG is likely to
proceed in an orderly manner," said Standard & Poor's credit
analyst Peter Grant. "In light of this, Standard & Poor's
considers that there is sufficient uncertainty to justify
adopting a conservative stance and lowering the insurer financial
strength ratings to 'BB' before withdrawing them."

The rating actions with respect to the hybrid securities and
preferred stock reflect a widening of the notching from the
ratings of the issuing entities at the time of withdrawal. This
is common practice given the potential for interest and/or
principal payments to be deferred. "In a run-off situation, there
is a substantially increased likelihood that the interests of
those stakeholders that have a residual claim on the assets of an
entity will be compromised," said Mr. Grant. "The more deeply
subordinated the claim, the greater the risk, and the notching
has been increased to reflect this."

Ratings List

Gerling-Konzern Globale Ruckversicherungs-AG

-- Counterparty credit rating(a) to BB/Negative/--  from
BBB/Watch Neg/--
-- Insurer financial strength rating(a) to BB from BBB/Watch Neg
-- Subordinated debt(4) to CCC from BB+/Watch Neg

Gerling Global General & Reinsurance Co. Ltd.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Reinsurance Co.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Re Corp. of America

-- Counterparty credit rating(a) to BB/Negative/-- from BBB/Watch
Neg
-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global International Reinsurance Co. Ltd.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Life Insurance Co., Toronto (4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Life Reassurance Co. Ltd., London, London(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg


Gerling Global Life Reinsurance Co. of Australia Pty. Ltd. (4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg


Gerling Global Reinsurance Co. Ltd., Zug.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Reinsurance Co. of Australia Pty. Ltd.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Reinsurance Co. of South Africa Ltd.(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Reinsurance Co., Toronto(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg

Gerling Global Reinsurance Corp. (US Branch)(4)(a)

-- Insurer financial strength rating(a) to BB from BBB/Watch Neg


Constitution Holding Inc.

-- Counterparty credit rating(a) to  B/Negative/-- from BBB-
/Developing/--

-- Preferred stock(4)(4) to CC from BB

(a)Rating to be withdrawn with immediate effect. (4)Issued by
Gerling Global Finance Alpha B.V. and subguaranteed by Gerling-
Konzern Globale Ruckversicherungs-AG. (4)(a)Guaranteed by
Gerling-Konzern Globale Ruckversicherungs-AG. (4)(4)Issued by
Constitution Capital Trust I and guaranteed by Constitution
Holding Inc.


===================
L U X E M B O U R G
===================


VANTICO GROUP: Reaches Agreement on Proposed Debt for Equity Swap
-----------------------------------------------------------------
Vantico Group S.A. announces that it has reached agreement in
principle with an informal committee of holders of Vantico's 12%
Senior Notes due 2010 and Morgan Grenfell Private Equity, on the
terms for a debt for equity swap which will substantially reduce
the group's overall indebtedness. As part of the proposed
transaction, the Company will also benefit from an equity
injection of CHF75 million of new money to be used for
operational purposes, with a further commitment to inject up to
CHF75 million if required.

The proposed debt for equity swap will involve the holders of the
Notes and MGPE, in its capacity as a lender to the Company,
exchanging their existing debt for 95% of the ordinary equity of
the Company. Holders of the Notes will be offered a cash
alternative in lieu of shares equivalent to e300 for each e1,000
of principal outstanding which will be separately funded by the
Committee. The Committee will not take up this cash alternative
in respect of their holdings. The remaining 5% of the equity will
be allocated to the financial stakeholders of Vantico Holding
S.A.

Whilst definitive terms and documentation for the proposed
restructuring are being finalized, the company's bank group has
provided further waivers, subject to continued satisfaction of
certain conditions, effective up to 28th February 2003 in
relation to the requirement to deliver covenant compliance
certificates for the third and fourth quarters of 2002. Vantico
yesterday paid the bank amortisation payment of CHF 22.4 million
which was originally scheduled for 31st December 2002.

The Company is continuing discussions with the bank group
regarding amendments to its existing senior credit facility and
expects to finalise these discussions in the near future.

As part of the proposed restructuring, the Committee, which
represents holders of in excess of 73% of the Senior Notes, will
not seek to enforce its rights in the event that the Company
elects not to pay the
Notes coupon due on 1st February 2003. The terms governing the
Notes provide the Company with a 30 day grace period following
the coupon due date.

Upon completion of the proposed restructuring, MatlinPatterson
Global Opportunities Partners L.P., a member of the Committee, is
expected to become the majority shareholder in Vantico.
MatlinPatterson expects to transfer this equity interest to the
Huntsman group of companies, which is jointly owned by the
Huntsman family and MatlinPatterson. There will be appropriate
minority shareholder protections.

Dr Helmut Strametz, Chief Executive Officer of Vantico said:
"We are delighted to announce this agreement with our key
financial stakeholders. The terms of the proposed restructuring
will not in any way impact customers, suppliers or employees who
should all ultimately benefit from a stronger, more flexible
Vantico. The restructuring proposal will remove the financial
uncertainty surrounding the Company and will allow our business
to develop and grow in order to better serve our customers.
Furthermore we are tremendously excited at the opportunities that
will result from working alongside the Huntsman businesses."

Peter R. Huntsman, Chief Executive Officer of Huntsman said:
"We congratulate Vantico and the Committee on this achievement.
The news will be welcomed by Vantico's employees, customers and
suppliers. Vantico has terrific prospects and, on closing of the
restructuring, we will be proud to have Vantico join the Huntsman
group."

About Vantico
Vantico was created through a management buy-out of the
Performance Polymers Division of Ciba S.C., backed by Morgan
Grenfell Private Equity. Vantico operates as a global leader in
providing solutions in the field of innovative coatings,
structural composites, adhesives, tooling materials, and
electrical and electronic insulation for the automotive,
electronic, electrical, aerospace and consumerdurable
industries.

Vantico is incorporated in Luxembourg and operates globally in
three Divisions: Polymer Specialties, Adhesives and Tooling and
Optronics.

Close Brothers Corporate Finance is acting for Vantico Holding
S.A. and its subsidiaries and Morgan Grenfell Private Equity in
connection with the Restructuring and no-one else and will not be
responsible to anyone other than Vantico International S.A. and
Morgan Grenfell Private Equity for providing the protections
offered to clients of Close Brothers Corporate Finance nor for
providing advice in relation to the Restructuring.

Lazard & Co., Limited is acting for the informal ad hoc committee
of Vantico Noteholders in connection with the Restructuring and
no-one else and will not be responsible to anyone other than the
informal ad hoc committee of Vantico Noteholders for providing
the protections offered to clients of Lazard nor for providing
advice in relation to the Restructuring.

CONTACT:  VANTICO
          Helmut Strametz, Chief Executive Officer
          Phone: +44 (0) 20 8814 7940
          Fax: +44 (0) 20 8814 7962
          E-mail: helmut.strametz@vantico.com

          Justin Court, Chief Financial Officer
          Phone: +44 (0) 20 8814 7940
          Fax: +44 (0) 20 8814 7950
          E-mail: justin.court@vantico.com

          Financial Adviser to Vantico and MGPE
          Close Brothers Corporate Finance
          Peter Marshall
          Phone: +44 (0) 20 7655 3100
          Fax: +44 (0) 20 7650 0999
          E-mail: peter.marshall@cbcf.com

          Richard Grainger
          Phone: +44 (0) 20 7655 3100
          Fax: +44 (0) 20 7655 8906
          E-mail: richard.grainger@cbcf.com

          Financial Adviser to the informal ad hoc committee of
Vantico
          Noteholders:
          Lazard
          Richard Stables
          Managing Director
          Phone: +44 (0) 20 7588 2721
          Fax: +44 (0) 20 7638 2363
          E-mail: richard.stables@lazard.com
          Alasdair Nisbet, Managing Director
          Phone: +44 (0) 20 7588 2721
          Fax: +44 (0) 20 7920 0274
          E-mail: alasdair.nisbet@lazard.com


VANTICO GROUP: Defers Interest Payment Due February 1, 2003
-----------------------------------------------------------
Vantico Group S.A. announces that, pending the outcome of on-
going restructuring negotiations between the company and its
stakeholders (including holders of the company's 12% Senior Notes
due 2010 and the bank group for the Vantico group of companies),
it will defer payment on the company's 12% Senior Notes due 2010.
The terms of the indenture governing the Notes allow for a 30-day
grace period following each payment date before resulting in an
Event of Default.

About Vantico
Vantico was created through a management buy-out of the
Performance Polymers Division of Ciba S.C., backed by Morgan
Grenfell Private Equity. Vantico operates as a global leader in
providing solutions in the field of innovative coatings,
structural composites, adhesives, tooling materials, and
electrical and electronic insulation for the automotive,
electronic, electrical, aerospace and consumer durable
industries.

Vantico is incorporated in Luxembourg and operates globally in
three Divisions: Polymer Specialties, Adhesives and Tooling and
Optronics.


VANTICO GROUP: S&P Lowers Senior Unsecured Debt Ratings
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior unsecured
debt ratings on Vantico Group S.A. to 'D' from 'C'.  The rating
was removed from CreditWatch, where it had been placed on June
11, 2002.

The action follows the Luxembourg-registered epoxy-resins
manufacturer's default on its senior unsecured notes' coupon due
February 1, 2003.

Standard & Poor's credit analyst Christine Hoarau explains that
although Vantico benefits from a 30-day grace period following
the
coupon due date, Fitch believes it is still unlikely to pay the
interest due on the notes.

The rating agency further says that the company's debt
restructuring, which calls for a debt-for-equity swap,
constitutes a default, and would trigger a downgrade to 'D' on
the senior notes.  The plan calls for bondholders and equity
sponsor, Morgan Grenfell Private Equity, to exchange their
existing debt for 95% of the ordinary equity of the company, and
for holders of the notes to take cash alternative in lieu of
shares equivalent to 30% of the bond par value.

The company's long-term corporate credit rating was lowered to
'D' on Jan. 3, 2003, following the announcement by the company
that it had delayed a loan payment on its senior bank debt.


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


GETRONICS N.V.: Company Profile
-------------------------------
NAME: Getronics N.V.

PHONE: +31-20-586-14-12

FAX: +31-20-586-15-68

WEBSITE: http://www.getronics.com

TYPE OF BUSINESS: Providers of vendor independent solutions and
services to professional users of Information and Communication
Technology (ICT).

Specifically, the company provides a variety of IT services,
including customer relationship management, consulting,
application integration and management, infrastructure planning
and deployment, and outsourced business and technology services.
It also distributes third-party computer and networking products.
Getronics serves the finance, government, telecommunications,
retail, transportation, and manufacturing markets.

SIC: Information Technology Services

COMPANY LOCATION: Donauweg 10
                  1043 AJ Amsterdam, The Netherlands

EXECUTIVES: Peter van Voorst, Chairman, Chief Operating Officer
            Jan Docter, Chief Financial Officer

MANAGEMENT COMMITTEE:
            Peter van Voorst, Chairman and CEO
            Jan Docter, Chief Financial Officer
            Stuart Appleton, Senior Vice President
                             Corporate Communications
            Mattijs Kropholler, Senior Vice President
                                Human Resources
            Barry Sykes, Senior Vice President Global
                         Business Development

INVESTOR RELATIONS: Getronics Investor Relations
                    Donauweg 10
                    P.O. BOX 652
                    1000 AR Amsterdam
                    The Netherlands
                    Phone: +31 20 586 1964
                    Fax: +31 20 586 1516
                    E-mail: investor.relations@getronics.com

NUMBER OF EMPLOYEES: More than 26,000 employees in over 30
                     Countries

LATEST FINANCIAL STATEMENT:
http://bankrupt.com/misc/getronics.pdf


DEBT: EUR630-million (October 04, 2002; TCR-EU)

THE TROUBLE: Getronics has suffered along with the rest of the
technology industry as companies around the world slash spending
on new computer equipment and services. The firm acquired most of
its debt when it paid dearly for U.S. rival Wang in 1999.

AUDITOR: PriceWaterhouseCoopers NV
         1301 Avenue of the Americas
         New York, NY 10019
         Phone: 646-471-4000
         Fax: 646-394-1301
         Homepage: http://www.pwcglobal.com



===========
N O R W A Y
===========


PETROLEUM GEO-SERVICES: Fitch Affirms Unsecured Debt at 'C'
-----------------------------------------------------------
Fitch Ratings has affirmed Petroleum Geo-Services ASA (PGO)
senior unsecured debt rating at 'C'. The ratings remain on Rating
Watch Negative. This affirmation follows the payment by PGO of
interest related to PGO's 6 5/8% senior notes due 2008 and its 7
1/8% senior notes due 2028. PGO finds itself in the same
situation it was in last month as it has utilized a 30-day grace
period to make an $8.2 million interest payment on its 8.15%
senior notes due 2029. This grace period expires Feb. 15, 2003.

Failure to make such payment within the 30-day grace period will
be considered to be an event of default, and the rating will be
lowered to 'D'. Should the coupon payment default be cured in the
grace period, a new rating will be assigned, but reflective of
the just cured default.

PGO is a technologically focused oilfield service company
principally involved in two businesses: geophysical seismic
services and production services. PGO acquires, processes,
manages and markets 3D, time-lapse and multicomponent seismic
data. This data is used by oil and gas companies in exploration
for new reserves, development of existing reservoirs and
management of producing oil and gas fields. In its production
services business PGO owns and operates four FPSOs and operates
numerous offshore production facilities for oil and gas companies
to produce from offshore fields more cost effectively.

CONTACT:  FITCH RATINGS
          Patrick McGeever
          Phone: 312/368-3124


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


DAEWOO-FSO: Faces Pressure From MG Rover to Finalize Deal
---------------------------------------------------------
MG Rover is pressuring creditors of bankrupt plant Daewoo-FSO to
finalize a partnership deal to create a new company out of the
troubled carmaker by February 14.

The British carmaker, which is owned by a consortium of west
Midlans businessmen, threatened Polish banks, Korean banks and
the Polish government to speed up their assessment or they will
walk away from the deal.

In October, shareholders of Daewoo-FSO Motor Polska filed a
motion to create a new company out of the troubled carmaker.

The deal could result to MG Rover taking 25% in the new company,
as well as Poland's Treasury and Daewoo-FSO's creditors taking
shares in exchange for debt. The Treasury holds 9.2% stake in the
factory, according to a previous article of the TCR-EU.

MG Rover had hoped to take the controlling stake in the plant for
USD125 million by the end of last year.  The long wait, however,
has taken its toll on the company, and they were quoted as
saying, "If we don't have a conclusion by February 14 we will
consider other options and we will walk away."


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


IRKUTSKENERGO: S&P Raised Long-Term Issuer Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term issuer
credit ratings on Russian vertically integrated electricity
utility Irkutskenergo, AO EiE to 'B-' from 'CCC+'.

The action reflects the positive impact of recent tariff
increases on the company's financial profile and its continued
debt reduction.

But according to the rating agency, the ratings remained
constrained by uncertainties regarding the Russian electricity
reform and company restructuring, the continued lack of
transparency in tariff regulation, high customer concentration,
the weak payment discipline of public sector consumers, and
reduced incentives for the owners to keep the company solvent due
to enhanced legal protection from bankruptcy filings.

Standard & Poor's Infrastructure Finance analyst Mikhail Galkin
said, "The ratings are supported by the company's electricity and
heat supply monopoly in the Irkutsk Oblast (foreign currency B-
/Positive/--) in Southern Siberia, its relatively low operating
costs due to the domination of hydropower generation in its asset
portfolio, as well as relatively low debt leverage."

S&P says that although Irkutskenergo's low-cost generation is
very competitive, company is not likely to seriously benefit from
ongoing market liberalization.  This is because most of the
electricity it produces is likely to be sold to neighboring
aluminum plants at below-average tariffs.

The second-largest regional utility in Russia derives more than
50% of its revenue and electricity sales volume from sales to two
large aluminum plants that are owned by the same industrial
groups, RusAL and SUAL, that control Irkutskenerg.  S&P warns
that payment problems related to the public sector are likely to
remain, at least in the medium term.

Sector reform is expected to result in dramatic changes in the
business and financial profile of Irkutskenergo.  It is also
hoped to increase transparency and reduce political interference
in tariff-setting.  But it still lacks clarity and is behind
schedule.

Irkutskenergo's rating is assigned a stable outlook based on
Standard & Poor's expectations that Irkutskenergo will keep its
debt leverage relatively low, in order to be flexible enough to
deal with changes and delays to the energy reform process.

Mr. Galkin said the outlook may be resolved as soon as there is
more certainty with regard to the sector reform and its
implications for Irkutskenergo's credit standing.

Irkutskenergo derives more than 95% of its sales in Irkutsk
Oblast, where it is located.  The company's main activities are
electricity generation, transmission, distribution, and heat
supply.


MOTOVILIHA PLANTS: To Undergo Major Restructuring This Year
-----------------------------------------------------------
General director Ivan Kostin said ailing Perm-based defense
company Motovilikha will go through a major restructuring this
year, adding that the management has already began to restore the
company's financial health.

Mr. Kostin also said the company hopes to net a profit for 2003,
and post sales 23% higher to some RUR3.2 (US$100 million) after
posting a losss of RUR450 million on sales of RUR2.6 billion in
2002.

Motovilikha's majority shareholder, Rus, a financial group,
employed the director last fall to undertake the overhaul of the
company the way he did with truck maker KamAz.

Mr. Kostin plans to restructure Motovilikha's numerous
subsidiaries, and create a more efficient head office, trimming
the managers by a third to 300 along the way.

The reorganization is also expected to see the company shed non-
core assets in order to concentrate on multiple rocket-launchers,
artillery systems, oil extraction and road-building equipment.

Mr. Kostin expects oil industry equipment sales to bring in about
a third of revenues this year.  He also hoped they would bag a
long-awaited contract to deliver 9A52-2T Smerch multiple-rocket
launch systems to India this April.


SBERBANK: Fitch Ratings Upgrades Individual Rating to 'C/D'
-----------------------------------------------------------
Fitch Ratings upgraded the Individual rating of the Savings Bank
of the Russian Federation (Sberbank) to 'C/D' from 'D' to reflect
the bank's improving profitability since 2000.  Sberbank's other
ratings are unchanged as follows: Long-term 'BB-', Short-term
'B', and Support '4T'. The Outlook for the Long-term rating is
Positive.

The international rating agency says the bank's profitability is
now in line with, or even above, that of other Russian banks, and
that its capitalization has also grown markedly.

While recognizing the bank's strong domestic franchise and its
well-diversified, steadily growing funding base, it warned that
the largest bank in Russia by assets and capital is facing
increasing competition, which is likely to put some pressure on
margins, particularly in the medium term.

The bank plans to ease this pressure by using its vast,
countrywide branch network to grow its retail and SME lending.
Fitch indicated to observe how Sberbank would manage the risks
inherent in this line of business.

Nothwitstanding good results over the past few years, Fitch warns
of the factors that could burden the bank's performance.  These
include high cost base and the need to invest a substantial
amount in new IT systems over the next four years.

The rating agency further highlighted that the central and
eastern European region's largest bank by equity and size of
deposit base is exposed to potential earnings volatility as a
result of its significant securities portfolio.  Still, the
agency expects the bank's profitability to remain respectable.

Fitch recommends that Sberbank continue to build up its
capitalization further.

Sberbank was incorporated in 1991 as an open joint-stock company.


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


AVANZIT SA: Dissolves Telsen Board of Directors Before Sale
-----------------------------------------------------------
The board of directors of Avanzit SA's media arm, Telson
Servicios Audiovisuales SLU, was dissolved before the unit could
be sold to venture capital group Corpfin Capital Asesores.

The insolvent Spanish technologies group is hoping to sell the
audiovisual producer, the only remaining profitable business of
the group, for EUR22 million, including the assumption of some of
its EUR76 million debt.

The troubled technology group accepted Corpfin's bid for
Avanzit's only profitable business last month.

The Spanish technologies group, together with its unit units,
Avanzit Telecom and Avanzit Tecnologia SL, has been in
receivership since mid-2002 following an unsuccessful attempt to
transform itself into a telecommunications, media and technology
company.  As a result of the venture, the company's total debt
ballooned to EUR235 million, prompting it to lay off of workers
and close divisions to survive.

The company's largest creditors are Santander Central Hispano SA,
Caja San Fernando and Caja Castilla La Mancha.



===========
S W E D E N
===========


LM ERICSSON: Posts Positive Cash Flow, Continued Cost Reductions
----------------------------------------------------------------
- Cash flow before financing SEK 1.6 b.

- Adjusted income before taxes SEK -2.2 b.

- Order intake SEK 33.0 b.*

- GSM/WCDMA sales up 4% sequentially

                        Fourth quarter      Twelve months
SEK b.              2002  2001  Change 2002  2001 2) Change
Orders, net         30.7  39.9  -23%  128.4  201.8  -36%
- Systems           28.5  34.2  -17%  115.3  183.3  -37%
- Other operations   4.7  7.4  -37%    22.7   27.4  -17%
Sales               36.7  58.5  -37%  145.8  210.8  -31%
- Systems           33.2  50.1  -34%  132.0  188.7  -30%
- Other operations   6.0  10.2  -41%   23.5   31.8  -26%
Adjusted Operating
Income 1)           -2.3  -4.2         -12.5  -18.2
- Systems           -0.3   0.4          -4.9    3.2
- Phones            -0.3  -0.7          -1.3  -14.6
- Other operations  -1.3  -3.2          -4.7  -5.1
- Unallocated       -0.4  -0.7          -1.6  -1.7
Adjusted Operating
Margin 1)            -6%    -7%          -9%  -9%
- Systems            -1%     1%          -4%   2%
- Other operations  -21%   -32%         -20%  -16%
Adjusted Income Before
Taxes 1)            -2.2   -5.1         -14.5 -21.1
Net Income          -8.3   -3.5         -19.0  -21.3
Earnings per share,
diluted (SEK)       -0.58  -0.31        -1.51  -1.94
Cash flow before
financing activities 1.6  19.9          -7.1    6.7
Number of employees                    64,621  85,198
1) Adjusted for:
- Capital gain, Juniper  -  -             -     5.5
- Non-operational capital
gains                -0.3  0.2            -     0.3
- Restructuring costs,
net                  -6.3   -            -12.0  -15.0
- Capitalization of
development expenses,
net                   0.6   -              3.2      -

2) 2001 figures are restated for:
- Changed accounting principles in Sweden 2002 regarding
consolidation of companies with a controlling interest. - Results
from parts of Phones transferred to the joint venture Sony
Ericsson Mobile Communications, reported under Share in earnings
of JV and Associated Companies for the full year 2001.
* Gross order intake excluding cancellations.

CEO COMMENTS

"Sales of GSM/WCDMA are up sequentially for the third quarter in
a row and the order intake in Europe, Middle East and Africa
(EMEA) improved significantly after a weak third quarter," says
Kurt Hellstr"m, President and CEO of Ericsson.

We improved Systems operating margins once again this quarter.
Our position in GSM/WCDMA remains solid and we are encouraged by
our progress in CDMA2000 with key wins in Asia and Latin America.
Sony Ericsson's performance also improved in the quarter and the
joint venture expects to start reporting profit during 2003.

The strategy to expand our Systems business through increased
sales of professional services is proving successful. By
capitalizing on our systems know-how we have taken an early lead
in this growing market segment. The recurring nature of this
business will make our revenue base more stable.

The sequential increase in sales and orders is more a factor of
seasonality than an indication of a market recovery. However,
with orders and sales at expected levels, good progress in our
restructuring and positive cash flow, our fourth quarter results
indicate that our business is beginning to stabilize.

Our overriding objective is to return to profit at some point in
2003 and improve cash flow. Our cost cutting is proceeding as
planned with a significant reduction of operating expenses
already evident. We will intensify our efforts to lower cost of
sales to meet our gross margin target.

   Top of page

MARKET VIEW

There are now more than 1.1 billion mobile subscribers worldwide
with approximately 51 million new subscribers added during the
fourth quarter. For the full year we estimate about 190 million
net subscriber additions, within our forecast of 175-215 million.
We believe that the number of mobile subscribers remains on track
to exceed 1.5 billion within three years with 165-180 million net
additions anticipated in 2003.

In line with the industry consensus and our previous estimate, we
believe that the mobile systems market declined about 20% to an
estimated USD 42 b. during 2002. For 2003, we believe that the
mobile systems market may decline by as much as 10%.

The telecommunications market correction is ongoing. We expect
the historical correlation between operator capital expenditure
(CAPEX) growth and revenue growth to eventually resume. However,
the current level of lower CAPEX spending as a percentage of
operator revenues will most likely remain.

An estimated 115 million mobile phones were sold through during
the fourth quarter bringing the total for the year to
approximately 395 million units. This compares with our full-year
estimate of about 390 million units and approximately 390 million
in 2001. We believe that the total units sold through during 2003
will be more than 430 million units.

The overall wireline systems market, which includes traditional
circuit-switching, broadband access, optical transmission and
multi-service networks, declined by over 30% during 2002 - in
line with our estimate of a decline significantly more than 20%.

Complementing the infrastructure market, there is also a large
and growing opportunity for providing services to network
operators. Excluding network rollout services, which are embedded
within the Systems market, the available market in 2003 for
professional services is estimated to be more than USD 30 b. with
a compound annual growth rate (CAGR) of more than 10%.
Professional Services include systems integration, network
operations outsourcing as well as a range of other advisory and
operational support services.

COST REDUCTIONS AND OPERATIONAL REALIGNMENT

In the fourth quarter our operating expense annual run rate
excluding restructuring costs was reduced to SEK 51 b. During the
quarter we reduced our headcount by 7,100 employees, bringing our
year-end headcount to 64,600. We remain on track to reach a SEK
38 b. run-rate for the fourth quarter 2003 and expect to be less
than 60,000 employees by year-end.

Reduced excess capacity costs as well as improvements in
processes and product design contributed to the stable gross
margin level offsetting the negative effects of an unfavorable
product mix.

During the quarter, restructuring charges were SEK 6.3 b. of
which SEK 5.8 b. is related to redundancies. SEK 0.2 b. were
related to the write-down of inventory and fixed assets as well
as other costs for establishing more flexible operations. Of the
SEK 28.6 b. planned restructuring costs SEK 5.5 b. remains. Cash
outlays in 2003 are expected to be approximately SEK 10.8 b.

OPERATIONAL AND FINANCIAL REVIEW

Systems
Order intake in the quarter improved sequentially to SEK 30.8 b.,
mainly due to seasonality. Compared to the fourth quarter last
year, order intake declined by 10%. Cancellations of SEK 2.3 b.
negatively affected orders booked. The Europe, Middle East and
Africa (EMEA) region showed strong improvement compared to the
previous quarter, while Latin America was down, partly due to
order cancellations but also weaker demand.

Table: Systems order development


(SEK b.)               Q1   Q2   Q3   Q4
2001                  62.8 51.0 35.3 34.2
2002                  39.8 33.7 23.3 30.8
Change %             -37%  -34% -34% -10%

Cancellations 2002  -2.1  -2.5  -5.4  -2.3
2002 Net           37.7   31.2  17.9  28.5
Change %           -40%  -39%  -49%  -17%

Sales in the quarter were SEK 33.2 b., up SEK 2.6 b. compared to
the third quarter and down 34% compared to last year. Europe,
Middle East and Africa (EMEA) and North America increased
sequentially, while Latin America and Asia Pacific declined
somewhat. The strongest parts of the Systems businesses were GSM,
CDMA and professional services.

Adjusted operating income for Systems was SEK -0.3 (0.4) b..
Excluding risk provisions for customer financing of SEK 0.7 b.
the result was SEK 0.4. b., compared to SEK 0.2 b. in the third
quarter. Gross margin has kept up well and operating expenses
have gradually been reduced through our restructuring activities.

As an extension of our System business, Global Services generated
sales of SEK 9.5 b. in the quarter. Excluding products, which
from 2003 are excluded from services, sales of professional
services grew 29% sequentially to SEK 5.7 b. and now represent
17% of Systems sales.

Mobile Systems
Orders in the quarter for our GSM/WCDMA track increased 51%
sequentially, mainly driven by the Europe, Middle East and Africa
(EMEA) region. Sales of GSM/WCDMA grew 4% sequentially and
declined only 14% for the full year, implying a sustained strong
market position. Full year sales of WCDMA equipment and
associated network rollout services represented 9% of Mobile
Systems sales.

The sharp decline in TDMA and PDC systems continued and combined
they now account for less than 10% of mobile systems sales.

Multi-Service Networks
Orders and sales in the quarter increased sequentially by 9% and
28% respectively, but declined compared to last year by 29% and
50%, primarily driven by continued weak demand for traditional
circuit-switching equipment, although our ENGINE solution
continues to develop favorably.

Phones
Our 50% share of income from Sony Ericsson Mobile Communications
is included in "Earnings from Joint Ventures and Associated
Companies."

Sony Ericsson Mobile Communications (SEMC)
The joint venture increased its shipments by 42% to 7.1 million
units during the quarter, mainly as a result of the expansion of
their product portfolio. Our 50% share of income before taxes in
the quarter was SEK -0.3 b., compared to SEK -0.5 b. in the third
quarter and SEK -0.7 b. a year ago. As previously announced,
Ericsson and Sony will each invest EUR 150 million into the joint
venture during the first quarter of 2003.

Other operations
After transferring a portion of our holdings in a Chinese
subsidiary to Sony Ericsson Mobile Communications, the company
has become an associated company. As a result, from this quarter
phone operations in China are included in our results as share in
earnings of Joint Ventures and Associated Companies.

Other Operations now include the following commercial businesses:
Defense Systems, Network Technology, Enterprise Systems, the
retained parts of Microelectronics as well as the investment
areas of Mobile Platforms and Bluetooth.

Sales improved by 4% sequentially, driven by Defense Systems.

Compared to the third quarter, adjusted operating income in Other
Operations was flat. Positive effects from the divestiture of
parts of Microelectronics and profit from Defense Systems only
partly offset losses in other units.

CONSOLIDATED ACCOUNTS

Income
Sales in the quarter were SEK 36.7 b., up 10% sequentially and
down 37% compared to the fourth quarter of 2001.

Gross margin remained stable, with a reduction of cost of goods
sold and excess capacity costs offsetting negative effects of an
unfavorable product mix. The seasonally adjusted operating
expense run rate was SEK 51 b. for the quarter excluding risk
provisions of SEK 0.7 b. for customer financing. The run rate
also excludes the effects of capitalization of development
expenses since they currently affect comparability.

The capitalization of development costs was started in January
2002 to conform to changes in Swedish GAAP. As no such costs were
reported in previous years, net capitalized amounts do not yet
include a normal rate of depreciation of a capitalized base.
Therefore, the positive net effect of this is deducted when
reporting adjusted operating income and adjusted income before
taxes.

Net capital losses were SEK 0.7 b. of which SEK 0.3 b. were
related to restructuring, and SEK 0.3 b. related to write-downs
and sales of shares. Share in earnings of associated companies
was net zero, including the loss of SEK 0.3 b. in Sony Ericsson.

In the quarter, the net effect of changes in foreign currency
exchange rates compared to rates one year ago was SEK -0.1 b. The
net effect in the first, second and third quarters were SEK 0.4,
0.8 and 0.6 b., respectively and SEK 1.7 b. for the year.

Financial net improved by SEK 0.7 b., as a result of interest
income on the proceeds from the rights offering in September
2002.

Adjusted income before taxes, excluding restructuring costs, non-
operational capital gains and net effects of capitalization of
development expenses, was SEK -2.2 b. in the quarter. Income
before taxes in the previous quarters of 2002 adjusted in the
same manner was SEK -5.3, -3.3 and -3.7 b., respectively and for
the full year SEK -14.5 (-21.1) b..

Net income was negatively affected by SEK 2.5 b. as certain tax
costs were recognized in the quarter. Of these, SEK 0.8 b.,
relate to foreign withholding taxes that were not deductible due
to insufficient taxable income and SEK 1.4 b. due to rulings by
Swedish tax authorities disallowing deductions of capital
discounts on convertible debentures and other costs.

Full-year diluted earnings per share were SEK -1.51 (-1.94).
Prior periods have been adjusted for the stock dividend element
of the stock issue.

Balance sheet and financing
The equity ratio was 37%, about the same level as last quarter,
despite the loss incurred during the fourth quarter. Total assets
were reduced during the quarter by SEK 28.9 b., of which SEK 8.2
b. is related to cash. Repayments of loans, including the lease
arrangement for test plant equipment from December 2001, amounted
to SEK 10.0 b..

Net debt improved in the quarter from SEK -5.2 b. to SEK -5.6 b.
with total cash continuing to exceed all interest bearing debts.

Lower purchase volumes and increased sales significantly reduced
inventory during the quarter, with inventory turnover (ITO)
improving to 5.1 turns from 4.3 last quarter.

Our days sales outstanding (DSO) improved sequentially from 103
days to 91 days. Even with the higher sales, we reduced accounts
receivable by SEK 3.8 b. compared with the third quarter.

Customer financing risk exposure was reduced by SEK 3.1 b. in the
quarter. As previously announced, the 2001 portfolio of customer
credits was discontinued. The credits, including Mobilcom, were
taken back on the balance sheet and an associated cash collateral
released. Certain of these credits have subsequently been sold in
the market and the Mobilcom credits are to be replaced with
France Telecom convertible bonds.

Deferred tax assets at year-end were SEK 26.0 b., an increase of
SEK 5.1 b. during 2002. Deferred tax assets are related to
countries with long or indefinite periods of utilization.

Table: Customer financing risk exposure

                        Dec 31  Mar 31  Jun 30  Sep 30  Dec 31
(SEK b.)               2001     2002    2002    2002    2002
On-balance-sheet credits 18.7   16.8    16.6    18.9    21.1
Off-balance-sheet credits12.8   12.3    11.5     6.8     1.5
Total credits            31.5   29.1    28.1    25.7    22.6
Less third party risk
coverage                -4.7   -1.4    -0.3    -0.8    -0.8
Ericsson risk exposure   26.8   27.7    27.8    24.9    21.8

On-balance-sheet credits,
net book value           14.8   12.7    12.4    12.7    14.0
Off-balance-sheet credits
recorded as contingent
liabilities             10.6   10.1     9.1     5.1     1.3
Financing commitments    31.2   28.1    25.3    14.0    14.0

Cash flow
Cash flow before financing activities was positive by SEK 1.6 b.
The main contributing factors were reduced inventory and improved
collection of receivables. The SEK -2.8 b. effect from customer
financing was mitigated by the release of a cash collateral of
SEK 1.2 b. for the 2001 Credit Portfolio.

With the discontinuance of pro forma reporting, capitalization of
development expenses of SEK 0.8 b. are now reported among
investing activities rather than as an item adjusting income.

Net income as well as items adjusting net income to cash was
affected by the increased tax costs in the quarter.

Adjusted for exceptional items, cash flow was SEK 5.2 b. in the
quarter. These items include the buyback of Mobilcom credits of
SEK -4.1 b. and SEK 0.5 b. in proceeds from the divestiture of
certain R&D operations.

OUTLOOK
In our last report we indicated that our fourth quarter Mobile
Systems sales could decline more than the overall market due to
our exposure to the sharply declining TDMA and PDC markets. For
2003, we believe that we will maintain our overall share of the
mobile systems market with an increase in 3G sales partly
offsetting lower sales of TDMA and PDC.

While we believe that the worst of the market decline is behind
us, the market remains unpredictable. Normal seasonality will
most likely prevail during the first quarter and sequential sales
will consequently be down.

We are planning to return to profit at some point in 2003 by
lowering our costs and adjusting to the prevailing market
conditions.

Parent Company information
The Parent Company business consists mainly of corporate
management and holding company functions. It also includes
activities performed on a commission basis by Ericsson Treasury
Services AB and Ericsson Credit AB regarding internal banking and
customer credit management. The Parent Company has branch- and
representative offices in 16 (15) countries.

Net sales for the year amounted to SEK 2.0 (1.4) b. and income
after financial items was SEK 2.3 (-6.4) b. Write-downs of
investments in subsidiaries have affected income by SEK -3.8 (-
19.0) b.

Major changes in the company's financial position for the year
were:

Decreased current and long-term commercial and financial
receivables from subsidiaries of SEK 35.5 b.

Increased short-term and long-term customer financing of SEK 6.2
b.

Increased investments in subsidiaries of SEK 6.1 b.

Short- and long-term internal borrowings decreased by SEK 37.2 b.
Notes, bond loans and convertible debentures, including short-
term portion, decreased by SEK 5.4 b. Stockholders' equity has
increased by SEK 30.1 b. and cash and short-term cash investments
have increased by SEK 10.3 b., mostly due to the rights issue in
September 2002. At year-end, cash and short-term cash investments
amounted to SEK 59.3
(49.0) b.

In accordance with the conditions of the Stock Purchase Plan for
Ericsson employees, 1,893,195 shares from treasury stock were
distributed during the fourth quarter to employees who left
Ericsson. An additional 291,635 shares were sold during the
fourth quarter, in order to cover social security costs related
to the Stock Purchase Plan. The holding of treasury stock at
December 31, 2002, was 154,360,278 Class B shares.

Dividend proposal
The Board of directors will propose to the Annual General Meeting
that no dividend is paid out for 2002.

Annual report
The annual report will be made available to shareholders at our
head office at Telefonplan, Stockholm, two weeks prior to the
Annual General Meeting.

Annual General Meeting of shareholders
The Annual General Meeting of shareholders will be held on
Tuesday, April 8, 2003, in Stockholm Globe Arena.

Accounting principles
This interim report has been prepared in accordance with the
Swedish Financial Accounting Standards Council's recommendation
RR 20, Interim reports.

We have changed accounting principles since our latest annual
report.

The following Swedish GAAP recommendations are now implemented:

RR 1:00, Consolidated financial statements

RR 15, Intangible assets

RR 16, Provisions, contingent liabilities and contingent assets

RR 17, Impairment of assets

RR 19, Discontinuing operations

RR 21, Borrowing costs

RR 23, Related party disclosures

The only material effects of these new standards relate to
RR1:00, regarding consolidation of controlled companies, and RR
15, regarding capitalization of development costs.

According to RR1:00 we have consolidated as subsidiaries certain
finance companies previously accounted for under the equity
method. We have restated previous year in our primary statements.

According to RR 15, starting from January 1, 2002 we have
capitalized certain development costs. Stockholm, February 3,
2003

Kurt Hellstr"m
President and CEO

Date for next report: April 28, 2003

Auditors' Report
We have reviewed the Fourth Quarter Report as of December 31,
2002, for Telefonaktiebolaget LM Ericsson (publ). We conducted
our review in accordance with the recommendation issued by FAR. A
review is limited primarily to enquiries of company personnel and
analytical procedures applied to financial data and thus provides
less assurance than an audit. We have not performed an audit and,
accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that
causes us to believe that the Fourth Quarter Report does not
comply with the requirements for interim reports in the Annual
Accounts Act.

Stockholm, February 3, 2002

Carl-Eric Bohlin
Authorized Public Accountant
PricewaterhouseCoopers AB
Olof Herolf
Authorized Public Accountant
PricewaterhouseCoopers AB
Thomas Thiel
Authorized Public Accountant

CONTACT:  LM ERICSSON
          Henry Stenson, Senior Vice President, Corporate
          Communications
          Phone: +46 8 719 4044
          E-mail: henry.stenson@lme.ericsson.se

          Investors
          Gary Pinkham, Vice President, Investor Relations
          Phone: +46 8 719 00 00
          E-mail: investor.relations@ericsson.com

          Lotta Lundin, Manager, Investor Relations
          Phone: +44 20 701 61 032
          E-mail: lotta.lundin@clo.ericsson.se

          Glenn Sapadin, Manager, Investor Relations
          Phone: +1 212 685 4030
          E-mail: investor.relations@ericsson.com

          Lars Jacobsson, Vice President, Financial Reporting and
          Analysis
          Phone: +46 8 719 9489, +46 70 519 9489
          E-mail: lars.jacobsson@lme.ericsson.se


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


CREDIT SUISSE: CSFB Places Quattrone on Administrative Leave
------------------------------------------------------------
Firm Acted Based on New Information Learned January 31

Credit Suisse First Boston (CSFB) announced that it has placed
Frank Quattrone, Head of CSFB's Global Technology Group, on
administrative leave pending completion of an investigation.  The
Firm said it took this action based on new information learned on
Friday, January 31.

The firm said that Mr. Quattrone was placed on leave for two
reasons.  First, the information discovered Friday raised
questions about Mr. Quattrone's response to an inquiry last week
by the Firm about whether he was aware of pending investigations
in 2000 when he sent an e-mail to employees regarding document
retention issues.  Second, the new information raised questions
about whether Mr. Quattrone acted appropriately in December 2000
when he sent that e-mail and permitted a subordinate to send a
similar e-mail to employees.

The Firm emphasized, however, that following these December 2000
e-mails regarding document retention, the Firm's legal department
acted promptly to ensure that all relevant documents would be
preserved and provided to authorities.

The Firm also said that it has notified the appropriate
government and regulatory authorities about the new information
learned on January 31 and is cooperating fully with them.

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.

                      *****
An e-mail that appears to relay the order of investment bankers
at Credit Suisse First Boston to clean out certain controversial
documents relating to the tech sector IPOs is under scrutiny by
regulators.

The e-mail, which included a reply endorsing the advice from star
CSFB technology investment banker Frank Quattrone, reminds the
firm's technology bankers to purge certain e-mails and other
documents, notably those linked with tech sector IPOs, says the
Wall Street Journal.


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


BNFL: Chief Executive to Leave Post Later This Year
---------------------------------------------------
Norman Askew, the chief executive of loss-making nuclear fuels
firm BNFL will resign from his post later this year, according to
The Scotsman.

Mr. Askew denied his departure has something to do with his
disappointment over the government's decision to drop the issue
of replacing nuclear power stations.

His resignation comes just as BNFL is seeking to conclude an
agreement to cut fuel costs at British Energy, its biggest
customer, the report noted.  It is known that the condition is
part of a government-backed rescue plan for the latter, wherein
GBP2.1 billion will be provided to help pay future nuclear fuel
decommissioning liabilities at British Energy.

The former head of East Midlands Electricity in the U.K. took the
helm of BNFL in 2000 just as the group is being criticized for
"systematic management failures" in the reports of safety
regulator Nuclear Installations Inspectorate.

BNFL had plans of a partial float, but massive nuclear
decommissioning liabilities forced it to abandon the project.  It
is now being asked to prepare a partial float in 2004-2005.

The government has agreed to transfer more than GBP40 billion of
nuclear waste liabilities from BNFL and the U.K. Atomic Energy
Authority to a new state-funded Liabilities Management Authority-
-a move that analysts believe would ease the pressure on the
company's finances and ease out the company's privatization.

BNFL had a GBP2.3 billion pre-tax loss in 2001-02.


BRITISH ENERGY: Rumors of Impending Rescue Buoys Share Price
------------------------------------------------------------
Shares in British Energy recovered a bit after speculations
circulated that the company might escape administration and could
be about to appoint a chief executive.

The shares rose 10% following indications that bondholders of the
nuclear generator could reach agreement with the government by
the time the company's GBP650 million state-backed loan expires
on February 14.

According to The Herald, the sources said the talks were likely
to be directly announced.

Following collapse of power prices in the region as a result of
the liberalization of the wholesale power market, the British
government provided the group with GBP650 million emergency loan
to sustain operations while it negotiates with lenders and
shareholders.

It was also believed that the company would announce the
replacement of Robin Jeffrey, who was ousted as executive
chairman two months ago.  According to the report, British Energy
is set to appoint an external candidate in the next few days
after talks with a final short-list of executives are done.
Sources interviewed played down reports the company's board had
agreed to appoint David Gilchrist, British Energy's head of
generation, as chief executive.

CONTACT:  BRITISH ENERGY PLC
          3 Redwood Crescent, Peel Park
          East Kilbride, Strathclyde G74 5PR,
          United Kingdom
          Phone: +44-135-526-2000
          Fax: +44-135-556-5656
          Home Page: http://www.british-energy.com
          Contact:
          Paul Heward, Investor Relations
          Phone: 01355 262201


HENDERSON GEARED: Proposes Winding Up and Reconstruction
--------------------------------------------------------
In the company's last interim report and accounts the Chairman of
the company stated that Shareholders should be offered the
opportunity to continue their investment or elect to receive the
value of some or all of their Shares in cash around March 8,
2003, when the company comes to the end of its life. This
announcement sets out the Board's proposals in that regard and
the reasons why the Board are unanimously recommending that
Shareholders vote in favor of their implementation.

Background to the Proposals

The company was launched in 1995 with a fixed life to 8 March
2003. Its stated objective was to achieve long-term growth in
both income and capital through investment predominantly in U.K.
equities. The Income Ordinary Shares were designed to provide a
relatively high initial yield, with the prospect of some capital
growth. The dividend paid on these Shares has increased from 6.48
pence per share for the company's first accounting period to 8.40
pence for the year to February 28, 2002. The NAV of the company
has fluctuated during its life partly due to the structural
gearing provided by the Zero Dividend Preference
Shares and partly due to the market downturn we have been
experiencing recently.

As at the close of business on 29 January 2003 (the latest
practicable date prior to the publication of this document) the
Company's total assets stood at approximately GBP46.21 million,
compared with approximately o38.66 million raised at launch
before issue expenses. Thus total assets have increased by 19.53
per cent. Over the company's life to that date, compared with an
increase of 13.89 per cent. In the FTSE All-Share Index over the
same period. With net income reinvested, the company has attained
a return of 55.37 per cent., compared with 44.85 per cent for the
FTSE All-Share Index over the period. The effect of the gearing
on the Income Ordinary Shares means that the return with net
income reinvested on those Shares has been 27.60 per cent.

The Zero Dividend Preference Shares have a predetermined right to
capital growth. From their subscription price at launch of 100
pence per Share they have an entitlement to a final value of
206.687 pence per Share on 8 March 2003. This equates to capital
growth of 9.5 per cent. per annum.

Under the company's Articles, the Directors are obliged to
convene an extraordinary general meeting of the company on 8
March 2003 (or if 8 March 2003 is not a business day, the nearest
previous business day), at which a resolution to place the
company into voluntary liquidation must be proposed, unless on or
before that date the Directors have been released from their
obligation to do so by a special resolution. Liquidation in this
manner would result in all Shareholders receiving cash for their
investment and, depending on their individual circumstances,
incurring a liability to capital gains tax.

The Board considers that many Shareholders would welcome an
opportunity to continue their investment in a tax-efficient
manner in a vehicle with a similar investment objective to that
of the Company. The Board is therefore recommending a
reconstruction of the Company which will allow Shareholders to
roll over some or all of their existing Shares into The City of
London Investment Trust plc or Henderson Preference & Bond Fund
in a tax-efficient manner or to elect to receive cash in respect
of some or all of their holdings. City of London invests
in a portfolio of UK equities broadly similar to that of
Henderson Geared Income & Growth. HPBF is a sub-fund of the
Henderson UK & Europe Funds, an open-ended investment company
managed by HGI, which aims to achieve a steady level of income
through investment in preference shares and bonds issued by the
U.K. and other European companies.

Options for Shareholders under the Proposals

The Proposals, which are subject to the approval of Shareholders
at the Meetings, provide for the reconstruction of the company pursuant
to a scheme of reconstruction under section 110 of the Insolvency
Act and for the division of the company's undertaking based upon
Elections made by Shareholders. If the Scheme is not implemented,
resolution 3 at the Second Extraordinary General Meeting provides
for the voluntary liquidation of the company as required under
the Articles.

Income Ordinary Shareholders

Income Ordinary Shareholders (other than Overseas Shareholders)
who are on the Share Register at 5.00 pm on the Record Date may
elect to receive, in any proportion, but subject to the scaling
back provisions set out below:

- City of London Shares; and/or

- HPBF Shares; and/or

- cash,

in each case on the basis that each Income Ordinary Share will be
valued at its Terminal Asset Value. Income Ordinary Shareholders
should be aware that the Terminal Asset Value will be different
from the current net asset value per Income Ordinary Share
because it will be subject to market movements until the
Calculation Date and because the company will incur costs in
relation to the Proposals, including the cost of realising some
of its assets.

Zero Dividend Preference Shareholders

Zero Dividend Preference Shareholders (other than Overseas
Shareholders) who are on the Share Register at 5.00 pm on the
Record Date may elect to receive, in any proportion, but subject
to the scaling back provisions set out below:

- City of London Shares; and/or

- HPBF Shares; and/or

- cash,

in each case on the basis that a Zero Dividend Preference Share
will be valued at 206.687 pence. This represents an amount equal
to the final entitlement per Zero Dividend Preference Share on 8
March 2003 as provided for in the Articles.


City of London Option

Subject to the scaling back provisions set out below,
Shareholders who elect for the City of London Option will receive
new ordinary shares in City of London.

City of London Shares will be issued at 100.5 per cent. of their
net asset value at close of business on 6 March 2003, which also
reflects stamp duty in respect of assets transferred to City of
London in consideration for the issue of City of London Shares
pursuant to the Scheme. City of London Shares will be allotted,
conditional on admission to listing on the Official List of the
UK Listing Authority and trading on the London Stock Exchange's
market for listed securities, prior to the opening of business on
10 March 2003. Dealings in the new ordinary shares in City of
London are expected to commence at the opening of business on 10
March 2003. City of London is an investment trust managed by HGI,
whose prime investment objective is to outperform over the long
term the total return of the FTSE All-Share Index through either
capital growth or income generation. It invests predominantly in
large-cap UK equities and has a portfolio broadly similar to that
of Henderson Geared Income & Growth. City of London's investment
manager is Job Curtis who has 15 years' experience of managing U.K.
equities and has managed City of London since 1991. Mr. Curtis is
a director of Henderson Geared Income & Growth and was its portfolio
manager from launch until October 1999.

As at the close of business on 29 January 2003 (the latest date
practicable prior to the publication of this document) the net
asset value per City of London Share was 161.5p, the City of
London Share price was 161.25p and the discount at which City of
London Shares traded was 0.15 per cent. On that date City of
London had 109 holdings and its total gross assets were GBP385.29
million.

City of London Shares qualify as an investment for ISAs and PEPs.

City of London has an unbroken record of annual dividend
increases since 1966.

City of London's dividend yield as at the close of business on 29
January 2003 (the latest practicable date prior to the
publication of this document) was 4.96 per cent. Although City of
London has a portfolio broadly similar to that of your company,
its yield is lower due to its conventional capital structure
compared with the split capital structure of Henderson Geared
Income & Growth.

City of London Shares allotted to Shareholders under the Scheme
will rank pari passu with City of London Shares in issue on 10
March 2003. Any City of London Shares issued to Shareholders
pursuant to the Scheme will therefore not rank for the third
interim dividend payable on 31 May 2003. They will rank for the
fourth interim dividend payable on 31 August 2003.

HPBF Option

Shareholders who elect (or are deemed to elect) for the HPBF
Option will receive class 'A' income shares in HPBF. HPBF is a
sub-fund of HUKEF, an open-ended investment company managed by
HGI, which aims to provide a return by investing primarily in
sterling denominated preference shares, Government securities,
corporate bonds, Eurobonds and other bonds issued by UK and other
European companies. HPBF's investment manager is John Pattullo,
who has 5 years' experience of managing fixed interest
portfolios. HPBF Shares qualify as an investment for ISAs and
PEPs. As at noon on 29 January 2003 (the latest
practicable date prior to the printing of this document) the net
asset value of HPBF was GBP391.76 million comprising 134
holdings.

HPBF Shares will be issued at the creation price of a HPBF Share
at noon on 10 March 2003 and no initial charge will be levied in
relation to them.

Cash Option

Shareholders may alternatively elect to receive cash in respect
of all or part of their holdings of Shares. The amount of cash to
be received for each Share in respect of which an election for
the Cash Option is made (or deemed to be made) will be, in the
case of Income Ordinary Shares, Terminal Asset Value and, in the
case of Zero Dividend Preference Shares, 206.687 pence, which is
an amount equal to the final entitlement per Zero Dividend
Preference Share on 8 March 2003 as provided for in the Articles.

The exact amount of cash payable to Income Ordinary Shareholders
cannot be calculated until the Calculation Date. For illustrative
purposes, on the basis of the Net Asset Value per Income Ordinary
Share of 71.6p as at the close of business on 29 January 2003
(the latest practicable date prior to the publication of this
document), the Directors estimate that the Terminal Asset Value
(excluding any portfolio realisation costs) would have been 68.5p
per Income Ordinary Share. It should be noted that this figure
should not be regarded as a forecast.

Implementation of the Proposals

For the purposes of implementing the Scheme, Shares will be
reclassified in accordance with Elections and deemed Elections
pursuant to a special resolution to be proposed at the First
Extraordinary General Meeting. A special resolution will also be
proposed at the First Extraordinary General Meeting to approve
the Scheme.

Following the company being placed into members' voluntary
liquidation at the Second Extraordinary General Meeting, the
Liquidators will set aside in the Liquidation Pool sufficient
assets to meet the company's actual and contingent liabilities,
including the expenses of the Proposals. The remaining assets
will then be divided in accordance with Elections and deemed
Elections and either realised to meet the sums due to
Shareholders who have validly elected (or are deemed to have
elected) to receive cash, transferred to City of London in
consideration for the issue of City of London Shares, or
transferred to HPBF in consideration for the issue of HPBF
Shares.

Under the terms of the Scheme, a portfolio of securities and cash
will be transferred by the Liquidators to City of London in
consideration for the issue of City of London Shares to
Shareholders who elect for the City of London Option.
Entitlements of Shareholders electing to receive City of London
Shares will be calculated as set out in paragraph 9 of Part IV of
this document. City of London Shares will be issued for this
purpose at 100.5 per cent. of net asset value per City of London
Share at close of business on the Calculation Date, as calculated
by the auditors of City of London.

Under the terms of the Scheme, a portfolio of securities and cash
will be transferred by the Liquidators to HPBF in consideration
for the issue of HPBF Shares to Shareholders who elect or are
deemed to have elected for the HPBF Option. HPBF Shares will be
issued for this purpose at the creation price of a HPBF Share at
noon on 10 March 2003, as calculated by HIFL, and no initial
charge will be levied in relation to them.

Shareholders who receive City of London Shares pursuant to the
City of London Option will receive certificated City of London
Shares if they hold their Shares in certificated form. City of
London Shares in uncertificated form will be issued and credited
to the CREST accounts of Shareholders receiving City of London
Shares under the City of London Option who hold their Shares in
uncertificated form. City of London Shares are expected to be
issued in uncertificated form and credited to the CREST accounts
of people entitled to them on 10 March 2003. Certificates for
City of London Shares in certificated form are expected to be
posted in the week commencing 17 March 2003.

Contract notes for HPBF Shares are expected to be despatched in
the week commencing 10 March 2003.

Shareholders who have validly elected (or are deemed to have
elected) to receive cash (unless the amount of the distribution
is o100,000 or more and the relevant account details on the Form
of Election have been completed to enable payment by CHAPS) will
be sent a cheque in respect of the amount to which they are
entitled. Cheques will be despatched on 8 March 2003 to Zero
Dividend Preference Shareholders and in the week commencing 10
March 2003 to Income Ordinary Shareholders. Payments by CHAPS
will be made on 10 March 2003 at the recipient's expense.

It is currently estimated by the Liquidators that the amount to
be set aside in the Liquidation Pool to provide for portfolio
realisation costs and contingencies over and above the company's
known liabilities will be GBP150,000.

To the extent that the amount set aside for liabilities is not
required, any cash balance remaining in the hands of Liquidators
after all liabilities of the Company have been satisfied under
the liquidation will be paid as one or more liquidation
distributions to Income Ordinary Shareholders on the Share
Register on the Effective Date, provided that if the individual
amount of any such distribution is less than GBP2.00, such amount
will be distributed to HPBF without any further issue of HPBF Shares.
The precise timing of any distributions will depend on the progress
of the liquidation and the receipt by the Liquidators of confirmation
from the appropriate tax authorities that the Company has no outstanding
tax liabilities.

The implementation of the Scheme is conditional, inter alia, upon
the passing by Income Ordinary Shareholders of the resolutions to
be proposed at the First Extraordinary General Meeting,
resolution 1 and resolution 2 to be proposed at the Second
Extraordinary General Meeting and the resolution to be proposed
at the Separate General Meeting.

If the Proposals relating to the Scheme are not approved in full
by Shareholders by noon on 7 March 2003, the Scheme will not be
implemented, and resolution 3 set out in the notice of the Second
Extraordinary Meeting, being the ordinary resolution for the
voluntary liquidation of the company required under the Articles,
will be proposed.

Failure to make an Election

Shareholders, other than Overseas Shareholders, who do not make a
valid Election by 5.00 pm on Monday 24 February for the purposes
of the Proposals will be deemed to have made Elections on the
following basis:

- Zero Dividend Preference Shareholders will be deemed to have
elected to receive cash; and

- Income Ordinary Shareholders will be deemed to have elected to
receive HPBF Shares, in each case in respect of their entire
holding of the relevant class of Shares.

Scaling back of Elections

The maximum number of City of London Shares that City of London
will issue pursuant to the Scheme is 8.0 million. If Elections
are received for the City of London Option which, if satisfied in
full, would require the issue of more than 8.0 million City of
London Shares, Income Ordinary Shareholders electing for the City
of London Option will have their Elections satisfied in priority
to Zero Dividend Preference Shareholders who elect for the City
of London Option. If Shareholders are scaled back, they will be
scaled back on a pro rata basis into HPBF Shares.

Benefits of the Scheme

The Directors believe that the Scheme provides a number of
attractive features for Shareholders:

- greater choice and more flexibility for both Income Ordinary
Shareholders and Zero Dividend Preference Shareholders than if
the Company is simply wound up. Shareholders can choose to
continue to seek capital and income growth through the UK equity
market by electing to invest in City of London Shares and/or
exposure to the bond and preference share markets in the UK and
Europe by electing for the HPBF Option;

- those Shareholders who are subject to capital gains tax who
wish to maintain an exposure to the U.K. equity market or the U.K.
and other European bond and preference share markets may do so
without incurring an immediate liability to capital gains tax by
rolling their investment in Henderson Geared Income & Growth into
either City of London or HPBF;

- HPBF Shares are priced at their net asset value and no initial
charge will be levied by HIFL on HPBF Shares to be issued
pursuant to the Proposals;
- there are no dealing costs associated with the City of London
Option;

- City of London is a significantly larger trust than Henderson
Geared Income & Growth with greater market liquidity;

- Income Ordinary Shareholders can make an Election in part for
City of London Shares and in part for HPBF Shares in order to
provide a level of income that is higher than that of City of
London Shares alone; and

- for those Shareholders who wish to realise some or all of their
investment, the Proposals provide Income Ordinary Shareholders
with the opportunity to receive cash at close to Net Asset Value
and Zero Dividend Preference Shareholders with the opportunity to
receive cash amounting to 206.687 pence per Share.

The choice between the various options available under the
Proposals will be a matter for each Shareholder to decide and
will be influenced by their own personal, financial and tax
circumstances and their investment objectives.

Costs and expenses

The direct costs of the Proposals, before taking account of any
costs associated with the realization of the company's assets and
the Liquidator's retention, are expected to amount to
approximately o773,738 (including VAT) which is equivalent
to approximately 3.13p per Income Ordinary Share.

Final Interim Dividend

On 20 February 2003 the Directors will declare the Final Interim
Dividend which will be an amount equal to the Board's best
estimate of the revenue profits of the company (including
accumulated revenue reserves) available for distribution on that
day. This will be paid on Thursday 6 March 2003 to Income
Ordinary Shareholders on the Share Register as at 5.00 pm on 28
February. The Income Ordinary Shares will go ex-dividend on 26
February 2003.

Dealings and settlement

If the Proposals are approved, the following will occur:

Share Register

The Share Register will be closed and disabled in CREST at the
close of business on 20 February 2003. The last day for dealings
in Shares on the London Stock Exchange for normal account
settlement (to enable settlement prior to the Record Date) will
be 5.00 pm on 17 February 2003 (on a normal rolling three day
settlement basis). As from 18 February 2003, dealings should be
for cash settlement only and will be registered in the normal way
if the transfer, accompanied by any applicable documents of
title, is received by the Registrar by 5.00 pm on 20 February 2003.
Transfers received after that time which adequately identify the
Shares transferred will be retained by the Registrar and registered
prior to the opening of the register in respect of Reclassified Shares.
Henderson Geared Income & Growth's register of members in respect of
the Reclassified Shares is expected to open at 8.00 am on 6 March
2003.

After the liquidation of the company and the making of any final
distribution to Income Ordinary Shareholders out of the
Liquidation Pool, existing certificates in respect of Shares will
cease to be of value for any purpose and any existing credit of
Shares in any stock account in CREST will be redundant.

Dealings

Application will be made for the Reclassified Shares to be
admitted to the Official List and to the London Stock Exchange
for dealings in the Reclassified Shares to commence at 8.00 am on
6 March 2003 and it is expected that dealings will be suspended
at 8.00 am on 7 March 2003. The Reclassified Shares are expected
to be delisted some time after the company's assets have been
transferred to City of London, HPBF or otherwise realized in
accordance with the Scheme.

Fractional entitlements

Fractions of City of London Shares and HPBF Shares will not be
issued. Instead, where an entitlement to a fraction of a City of
London Share or HPBF Share would otherwise arise, it will be
rounded down to the nearest whole relevant City of London Share
or HPBF Share. Any assets representing fractional entitlements
will be transferred by the Liquidators to City of London or HPBF
without further City of London Shares or HPBF Shares being
issued.

Overseas Shareholders

Overseas Shareholders will not receive Forms of Election. If the
Scheme becomes effective, Overseas Shareholders will receive cash
in respect of their entire holdings.

It is the responsibility of Shareholders who are resident in, or
citizens of, jurisdictions outside the United Kingdom to inform
themselves about and observe any legal requirements in their
relevant jurisdiction. Shareholders who are subject to taxation
outside the United Kingdom should consult their tax adviser as to
the treatment of the cash proceeds received by them under the
Proposals.

Share Plan, PEP and ISA holders

If you are the beneficial owner of Shares held through the
Henderson Investment Trust Share Plan, the Henderson Selection
PEP, the Henderson Investment Trust PEP, the Henderson Selection
ISA or the Henderson Investment Trust ISA, you will receive
separate instructions on how you can participate in the
Proposals.

Shareholder meetings

First Extraordinary General Meeting

The First Extraordinary General Meeting is being convened for
10.30 am on 26 February 2003. At this Meeting, at which all
Income Ordinary Shareholders may attend and vote, special
resolutions will be proposed to approve the Scheme, to reclassify
Shares pursuant to Elections under the Scheme, to make the
necessary changes to the Articles and to authorise the
implementation of the Scheme by the Liquidators. The Scheme will
not become effective until the passing of the resolution to be
proposed at the Separate General Meeting and the special and
extraordinary resolutions to be proposed at the Second
Extraordinary General Meeting and is also subject to the
Directors making no such resolution as is referred to in the
Scheme.

The quorum requirement for the First Extraordinary General
Meeting will be two Income Ordinary Shareholders present in
person or by proxy and entitled to vote.

The resolutions will require the approval of not less than 75 per
cent. of the votes cast by those Income Ordinary Shareholders
present in person on a show of hands or present in person or by
proxy on a poll.

Separate General Meeting

The Separate General Meeting is being convened for 10.40 am (or
as soon thereafter as the First Extraordinary General Meeting
convened for the same time that day has concluded or been
adjourned) on 26 February 2003. At this Meeting, at which all
Income Ordinary Shareholders may attend and vote, a resolution
will be proposed to approve the passing of and carrying into
effect of the special and extraordinary resolutions of the
company contained in the notices of the Extraordinary General
Meetings of the company convened for 26 February 2003 and 7 March
2003, to approve the implementation in all other respects of the
Scheme, and to consent to any variation or abrogation and/or
deemed variation or abrogation of the rights attaching to the
Income Ordinary Shares.

The quorum requirement for the Separate General Meeting will be
two Income Ordinary Shareholders present in person or by proxy
and entitled to vote.

The resolution will require the approval of not less than 90 per
cent. of the votes cast by those Income Ordinary Shareholders
present in person on a show of hands or present in person or by
proxy on a poll.

Second Extraordinary General Meeting

The Second Extraordinary General Meeting is being convened for
10.30 am on 7 March 2003. At this Meeting, at which all Income
Ordinary Shareholders may attend and vote, a special resolution
will be proposed to approve the winding up of the company for the
purposes of the Scheme and to appoint the Liquidators, and an
extraordinary resolution will be proposed to confer appropriate
powers on them. These resolutions are conditional, inter alia,
upon the Scheme being approved at the First Extraordinary General
Meeting and the Separate General Meeting.

The quorum requirement for the Second Extraordinary General
Meeting will be two Income Ordinary Shareholders present in
person or by proxy and entitled to vote.

The special and extraordinary resolutions will require the
approval of not less than 75 per cent. of the votes cast by those
Income Ordinary Shareholders present in person on a show of hands
or present in person or by proxy on a poll.

If the Proposals relating to the implementation of the Scheme are
approved, they will bind all Shareholders whether or not they
have voted in favour of the Proposals at the Meetings, except
Shareholders who validly dissent as provided in section 111(2) of
the Insolvency. The position of Shareholders who make no Election
is described above under the heading 'Failure to make an
Election'.

If the resolutions relating to the implementation of the Scheme
are not approved by noon on 7 March 2003, the ordinary resolution
set out in the notice of the Second Extraordinary General Meeting
for the voluntary liquidation of the company will be proposed as
provided for in the Articles. If such resolution is proposed,
both Income Ordinary Shareholders and Zero Dividend Preference
Shareholders will be entitled to vote and voting will be on a
poll. Those holders of Income Ordinary Shares or Zero Dividend
Preference Shares who (being individuals) are present in person
or by proxy or (being corporations) are present by proxy or
representative duly authorised under the Companies Act (not being
himself a member entitled to vote) and entitled to vote, and who
vote in favour of the resolution will have such number of votes
in respect of each Share held by him (including fractions) so
that the aggregate number of votes cast in favour of the
resolution is four times the aggregate number of votes cast
against the resolution, and each member present in person or by
proxy and entitled to vote and who votes against such resolution
will have one vote for each Share held.

If the Proposals relating to this resolution are approved, they
will bind all Shareholders, whether or not they have voted in
favour of such resolution at the Second Extraordinary General
Meeting. If the Proposals relating to this resolution are
approved, the assets of the company available for distribution to
Shareholders will be applied as follows (and in accordance with
the Articles):

(i) Zero Dividend Preference Shareholders will be entitled to
receive 206.687 pence per Zero Dividend Preference Share; and

(ii) all further surplus assets of the company available for
distribution will be paid to Income Ordinary Shareholders.

If the Proposals relating to the implementation of the Scheme are
not approved and the ordinary resolution for the voluntary
liquidation of the company is also not approved, the company will
continue in its current form under the Articles.

Action to be taken

Forms of Election

It is important that Shareholders return their Forms of Election
as soon as possible and in any event no later than 5.00 pm on 24
February 2003.

Shareholders should note that, if they hold Zero Dividend
Preference Shares and Income Ordinary Shares, they must complete
a separate Form of Election for each holding. Further, if they
hold Shares in both certificated and uncertificated form, they
must complete a separate Form of Election for each holding.

Similarly, Shareholders should complete a separate Form of
Election for Shares held under different member account
references within CREST and for Shares held in certificated form
but under different designations. Shareholders who have any
queries relating to the completion of the Form of Election or who
require further copies of the Form of Election, should contact
Computershare Investor Services PLC at PO Box 859, The Pavilions,
Bridgwater Road, Bristol BS99 1XZ or on telephone number 0870 702
0100.

Shareholders are not required to surrender their share
certificates (nor, in the case of CREST participants, are they
required to make a transfer to escrow) in support of their Form
of Election. Shareholders should retain their share certificates
until the Company is dissolved, after which they will cease to be
of any value.

Shareholders (other than Overseas Shareholders) who do not make a
valid election by 5.00 pm on 24 February 2003 will, in the case
of Income Ordinary Shareholders, be deemed to have elected to
receive HPBF Shares and, in the case of Zero Dividend Preference
Shareholders, be deemed to have elected to receive cash.

Forms of Proxy

Regardless of the Elections they intend to make, Shareholders
should return their Forms of Proxy for the First Extraordinary
General Meeting, the Separate General Meeting and the Second
Extraordinary General Meeting as soon as possible and in any
event no later than 48 hours before the relevant Meeting.

Recommendation

The Board, which has been advised by UBS Warburg, believes that
the Proposals are in the best interests of the company and of
Shareholders as a whole.

Accordingly, the Board unanimously recommends Shareholders to
vote in favour of the resolutions to be proposed at the Meetings
irrespective of any Election they may wish to make under the
Scheme. The Directors intend to do the same in respect of their
own beneficial and non-beneficial holdings of Shares (amounting
in aggregate to 113,179 Income Ordinary Shares representing 0.46
per cent. Of the issued share capital of the company).

The choice between the Options under the Proposals is a matter
for each Shareholder to decide, and will be influenced by their
own individual financial and tax circumstances and their investment
objectives. Shareholders should seek advice from their own
independent financial adviser authorised under FSMA and in any
event are strongly recommended to make an Election.

The Circular containing the full terms and conditions of the
Proposals was posted to Shareholders Monday.

Terms defined in the Circular, dated 3 February 2003, have the
same meaning when used herein unless the context otherwise
requires.

UBS Warburg Ltd. is acting for Henderson Geared Income & Growth
Trust plc and is not acting for any other persons and will not be
responsible to such other persons for providing the protections
afforded to customers of UBS Warburg Ltd. or for advising them on
the contents of this announcement or any matter referred to
herein.

EXPECTED TIMETABLE

2003

Wednesday, 19 February    Latest time for receipt of
PEP/ISA/Share Plan Form(s) of Direction for the First
Extraordinary
10.30 am                  General Meeting and the Separate
General Meeting

Wednesday, 19 February    Latest time for receipt of
PEP/ISA/Share Plan Form(s) of Instruction
5.00 pm

Wednesday, 19 February    Latest time for receipt of
PEP/ISA/Share Plan Form(s) of Instruction
5.00 pm

Thursday, 20 February     Record Date for the purposes of
Elections and Final Interim Dividend
5.00 pm                   Share Register closed

Monday, 24 February 10.30 Latest time for receipt of Forms of
Proxy for the First Extraordinary General Meeting
am

Monday, 24 February 10.40 Latest time for receipt of Forms of
Proxy for the Separate General Meeting
am

Monday, 24 February 5.00  Latest time for receipt of Forms of
Election
pm

Wednesday, 26 February    First Extraordinary General Meeting
10.30 am

Wednesday, 26 February    Separate General Meeting
10.40 am

Friday, 28 February 10.30 Latest time for receipt of
PEP/ISA/Share Plan Forms of Direction for the Second
Extraordinary
am                        General Meeting

Friday, 28 February 5.00  Record date for the purposes of the
Final Interim Dividend
pm

Wednesday, 5 March 10.30  Latest time for receipt of Form(s) of
Proxy for the Second Extraordinary General Meeting
am

Wednesday, 5 March        Ex-dividend date for the third interim
dividend on City of London Shares

Thursday, 6 March 8.00 am Dealings in Reclassified Shares
commence*

Thursday, 6 March Close   Calculation Date
of business

Thursday, 6 March         Payment of Final Interim Dividend

Friday, 7 March 8.00 am   Suspension of dealings in Reclassified
Shares

Friday, 7 March 10.30 am  Second Extraordinary General Meeting

Friday, 7 March           Effective Date

Saturday, 8 March         Cheques to be posted in respect of cash
distributions to Zero Dividend Preference Shareholders
                          who have elected or are deemed to have
elected for the Cash Option

Monday, 10 March          City of London Shares issued in
uncertificated form to be credited to the stock accounts in
                          CREST of the persons entitled to them

Monday, 10 March 8.00 am  Dealings in City of London Shares
issued under the Scheme commence

Week commencing 10 March  Contract notes for HPBF Shares
despatched
                          Cheques to be posted in respect of cash
distributions to Income Ordinary Shareholders who have
                          elected for the Cash Option

Week commencing 17 March  Certificates to be posted in respect of
City of London Shares issued in certificated form


* The Reclassified Shares will arise when the first resolution
proposed at the First Extraordinary General Meeting takes effect
and are a technical requirement of the Scheme. Shares will be
reclassified according to the Elections made (or deemed to have
been made) by Shareholders.

CONTACT:  HENDERSON GEARED INCOME & GROWTH TRUST PLC
          Jonathan Agnew (Chairman)
          Phone: 07714 243 891

          Henderson Global Investors
          Stephen Westwood
          Phone: 020 7818 5517

          Jane Lewis
          Phone: 020 7818 6756

          UBS Warburg Ltd.
          John Korwin-Szymanowski
          Phone: 020 7568 4219
          Nicholas Rucker
          Phone: 020 7568 8574


L GARDNER: London Bourse Launches Investigation of Ex-Directors
---------------------------------------------------------------
The London Stock Exchange is launching a probe into statements
made by L Gardner's former directors whose buy-out plans of the
company's remaining viable aerospace operations are subject to
criticisms by shareholders.

The engineering group placed 5 trading non-aerospace subsidiaries
into administration just months after moving to Alternative
Investment Market.  The units are Sloman Engineering Limited, ADA
Manufacturing Services Limited, Gardner Avon Limited, Gardner
Parts Limited and Bentall Rowlands Limited.

The shareholders, who lodged the complaints to the Financial
Services Authority and the Department of Trade and Industry,
criticized the directors for overseeing the company's downfall
and at the same time offering to buy the remaining profitable
aerospace operation.

The investors are concerned that should the directors be allowed
to buy the division, they would be left with nothing, according
to the Financial Times.


SCOTTISH & NEWCASTLE: Incurs New Costs of GBP15 MM
--------------------------------------------------
On December 2, 2002, Scottish & Newcastle announced that the
implementation of the supply chain reorganization in Scottish
Courage, its U.K. beer division, had resulted in greater than
expected disruption costs and delays in the realization of cost
savings. Since then, a number of developments have taken place in
order to maintain satisfactory levels of customer service:

- the company accelerated the opening of the third and largest of
its Regional Distribution Centres in Thatcham, Berkshire.

- at the same time, the historical depot network remains
operational resulting in a significant increase in 'double
running' costs.

In addition, the current level of productivity of the new
Regional Distribution Centers is substantially below
expectations. As a result of all of these factors, the company
has re-estimated the time it will take to reach satisfactory
levels of productivity in the new supply chain.

As a consequence, it is anticipated that Scottish Courage will
incur further incremental costs of GBP15 million in the second
half of the current financial year, ending 27 April 2003.

Scottish Courage is taking strong management actions to resolve
this issue, however it is expected that the business will incur
additional costs in the supply chain for the remainder of the
calendar year. Scottish Courage continues to expect a robust
performance from its key brands, but as a result of these
additional costs, no significant growth in operating profit is
expected in the UK beer division in the calendar year 2003.

From 2004, Scottish Courage expects the transition to the new
network to be largely complete. At this time, the company will
optimize the effectiveness of the new supply chain as well as
benefiting from the other cost saving initiatives previously
indicated.

TRADING PERFORMANCE

In Scottish Courage, the performance of key brands continues to
be strong, however the company has been affected by the well
reported market weaknesses, particularly in the high street,
bringing profits under some additional pressure.

S&N Retail, with a quality estate in strong sectors, continues to
perform well.

In International Beer, including Russia, the performance is in
line with expectations.

CONTACT:  Jeremy Blood, Corporate Affairs
          Phone: 0131 528 2130

           Bridget Walker (Investors)
           Phone: 0131 528 2132


SILENTNIGHT HOLDINGS: Issues Fifth Profit Warning Within a Year
---------------------------------------------------------------
In its Trading Statement, bedmaker Silentnight said:

As indicated in our interim results for the six months ended 3
August 2002 trading conditions have become more challenging
across most of our businesses in the second half of the year.
Whilst it is pleasing to report that sales in the Bed Division
are slightly up on the previous year, overall profit margins have
been under pressure. The Furniture Division's sales and losses
further deteriorated in the second half.

The Directors have now substantially completed their review of
the Furniture Division.  This division continues to incur trading
losses and a worsening order book, which in the opinion of the
Directors, will not be reversed without substantial
reorganization.

The difficulties of this business are caused in large part by the
complexity and very broad range of products and, with
considerations such as the commonality of customers with the Bed
Division, the resolution of the problems is not straight forward.
The Directors are currently finalizing their plans for the
Division and it is intended that these will be concluded by March
2003.

However, the implementation of these plans will incur further
substantial exceptional costs and trading losses will continue
until the plans are completed.  In the meantime, the Directors
have commenced corrective action by strengthening the management
with senior level appointments at Ducal and Cornwell Parker and
embarking on a cost reduction program.

Despite the poor trading the Balance Sheet remains strong and has
benefited from the receipt of GBP3.8 million on January 29, 2003
following the previously advised disposal of the Cornwell Parker
property at Burnley. The Company's current net debt is nominal
and it still enjoys a strong net asset position, before any
further exceptional costs for the matters referred to above.
However in addition, we are also expecting a further
deterioration next year in the pension fund position given the
substantial decline in equity valuations.

                                     *****
The announcement sent the company's shares 16% to 107.5 p.

Silentnight's troubles started two years ago when it invested its
cash pile on the Parker Knoll chairs business owned by Cornwell
Parker and solid wood and pine specialist Ducal.

According to Yorkshire Post, chief executive Nino Allenza
admitted: "I think it's down to the fact that we found it
difficult to integrate the businesses within the group."

House broker Beeson Gregory is expecting between GBP25 million
and GBP30 million of exceptional costs within over two years.
Some GBP9 million was accounted for in the first half.

The broker is forecasting underlying taxable profits of GBP3.5
million in the latest year, against GBP12.1 million the other
year.


TEXSTYLE WORLD: Asks Internacionale Chairman to Simplify Bid
------------------------------------------------------------
Texstyle World has asked the chairman of Scottish retail group
Internacionale, Ken Cairnduff, to "clean up" and "simplify" his
bid for the stricken soft furnishings group.

The retail entrepreneur, the only bidder left in the running who
wants to buy the whole business and run it as a going concern,
had hoped for a swift resolution to his bid for Texstyle after
the group fell into administration before Christmas.

Cairnbuff has become increasingly frustrated by the length of the
sale process, and is keen to wrap up the deal before staff find
alternative jobs and before stock runs low, says The Herald.

In this connection, Texstyle administrator Kroll Buchler Phillips
must decide whether to sell the business whole to Cairnduff, or
else be left with other buyers who are only interested in
acquiring bits of the group.

On his meeting with Kroll last Friday, Cairnbuff commented: "We
did make some progress, but not as much as I was hoping for.
Kroll has asked us to go away and clean up our bid, just to
simplify it, and we are working on that now."

He hopes to meet with Kroll later this week to discuss his
simplified bid.

Cairnduff, owned by U.S. company Hilco, plans to merge Texstyle's
50 stores into his own 102-strong clothing-to-homeware chain,
Internacionale-Au-Naturale.

The company employs 600 staff and has GBP8 million of debts.


THISTLE HOTELS: Says No Bank Investigation, No Outstanding Loans
----------------------------------------------------------------
Thistle Hotels PLC has issued a flat denial that its bankers led
by Royal Bank of Scotland has appointed Ernst & Young to carry
out a review of the group's operation amid a downturn in trading.

Thistle notes the press speculation on 2 February 2003 that its
bankers led by the Royal Bank of Scotland have appointed Ernst &
Young to carry out a review of Thistle's business. Thistle
confirms that neither the Royal Bank of Scotland nor Ernst &
Young has had any discussions with Thistle in this connection.
The Royal Bank of Scotland has confirmed that it has not
instigated any such business review. Thistle currently has no
outstanding loans or debts with any Bank including the Royal Bank
of Scotland.

Thistle released a trading update on January 16, 2003 and, as
planned, will announce preliminary results for the financial year
ended 29 December 2002 on 3 March 2003.

                                     ******
The Sunday Telegraph said bankers of British hotel chain Thistle
Hotels PLC, alarmed at the group's precarious trading position
and questioning over the ability of the management to steer the
company through a period of uncertainty in the market, hired
Ernst & Young to carry out a review of the business.

The report said such a review could lead to sweeping management
changes and disposals at the hotels group, which has already sold
more than half of its 56 hotels across the U.K. last year to gain
operating flexibility, amid the slump in the tourism industry.

CONTACT:  THISTLE HOTELS PLC
          Ian Burke
          Phone: 020 7895 2304


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

          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 2003.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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