/raid1/www/Hosts/bankrupt/TCREUR_Public/030224.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Monday, February 24, 2003, Vol. 4, No. 38
Headlines
* F I N L A N D *
DYNEA INTERNATIONAL: Moody's Confirms Caa1 Senior Notes Rating
FINNAIR OYJ: Expects Further Difficulties in Early Part of 2003
* F R A N C E *
AIR LIB: Air France to Absorb 1,000 Former Employees
ARCELOR SA: Announces Sale of Galmed to ThyssenKrupp
METALEUROP SA: Suspended Shares to Resume Trading in Euronext
SUEZ SA: Management Committee Director Resigns From Board
SUEZ SA: Chairman Announces Three Recent Appointments
* G E R M A N Y *
COMMERZBANK AG: Sells Stake in Germany's Largest Brewer
DEUTSCHE BA: Parent May Seek Talks With Other Potential Buyers
DEUTSCHE TELEKOM: Convertible Bond Issuance Oversubscribed
DRESDNER BANK: Chairman to Resign Should Return to Profit Fail
EM.TV & MERCHANDISING: Loses Claim Regarding Shares in Speed
HERLITZ: EU Commission Investigates Loan Given to Subsidiary
HVB GROUP: Ratings Affirmed After Issuance of Year-End Results
HVB GROUP: Registers EUR858 MM Net Loss in Preliminary Results
KIRCHMEDIA GMBH: Saban Tables Binding Offer for Assets
THYSSENKRUPP AG: S&P Downgrades Ratings by Two Notches to BB+
* L U X E M B O U R G *
MILLICOM INTERNATIONAL: Shareholders Approve Reverse Stock Split
MILLICOM INTERNATIONAL: Advises on Extension of Exchange Offer
* N E T H E R L A N D S *
RELIANT RESOURCES: Agrees to Sell European Business to Nv Nuon
* S P A I N *
AVANZIT SA: Gives Telson Creditors Ultimatum to Submit Decision
BABCOCK BORSIG: Grupo Duro Abandons Plan to Buy Spanish Unit
* U N I T E D K I N G D O M *
ABERDEEN ASSET: Shareholders Approve Disposal of Retail Fund
BAE SYSTEMS: New Structure of Contracts to Involve Rise in Cost
BAE SYSTEMS: Presents Preliminary Results Announcement 2002
BAE SYSTEMS: Executive Chairman Denies Management Shakeup
BLAZEPOINT GROUP: Informs of Liquidation Changes in FTSE Indices
CHRISTIAN SALVESEN: Poor Trading Prompts Another Profit Warning
CORDIANT COMMUNICATIONS: To Sell Assets to Prop up Balance Sheet
CORUS GROUP: Additional Job Cuts in U.K. Operation Likely
ZYZYGY PLC: Adviser Resigns, Refinancing Talks Ongoing
=============
F I N L A N D
=============
DYNEA INTERNATIONAL: Moody's Confirms Caa1 Senior Notes Rating
--------------------------------------------------------------
Moody's Investors Service confirmed the B2 senior implied rating
and the Caa1 senior notes rating of Dynea International Oy to
reflect improvement in the group's liquidity, and revision of the
group's financial covenants. The rating agency also acknowledges
shareholder support in the EUR35 million equity injection from
parent company, Dynea Oy.
But while the revision of the group's financial covenants for the
years 2003-2004 gives it more headroom, Moody's cautioned that
this headroom remains very tight.
According to Moody's the rating outlook remains negative to
reflect: "the challenging business and financial environment in
which Dynea operates; the tight, albeit recently re-negotiated
(until December 2004), bank covenant package; and the improved
but still relatively limited liquidity headroom available to the
group.
Moody's predict a challenging year 2003 for Dynea in the light of
a continued depression in the German construction industry,
Dynea's key-end market. Higher raw material prices, time lag, as
well as customer's reluctance in accepting these raw material
price increases are expected to constraint its margin even more.
Dynea has acquired Chemitec companies, but Moody's says the
integration of the acquisition will neither generate integration
risks nor significant synergy benefits.
Ratings affected by this confirmation are:
- The Caa1 rating on the EUR 250 million in 12.25% senior notes
of Dynea International Oy.
- The B2 senior implied rating for Dynea International Oy
- The Caa1 senior unsecured issuer rating.
Bondholders potentially face material losses on the senior notes
as a result of an expected low asset valuation for such business
in the current environment. Furthermore, bondholders are
structurally subordinated to secured bank debt holders (bank debt
represents around 55% of total debt after bank debt pre-payment
related to the oil field chemicals disposal proceeds).
Dynea International Oy is 100% owned by Dynea Oy and is a leading
formaldehyde resins producer domiciled in Helsinki, Finland,
generating Euro 950 million in sales as of December 31, 2002.
FINNAIR OYJ: Expects Further Difficulties in Early Part of 2003
---------------------------------------------------------------
Finnair Oyj posted a fourth-quarter loss after financial items of
EUR0.1 million, excluding EUR12.5 million of capital gains. The
figure is down from a loss of EUR21.3 million a year earlier.
Analysts had expected a profit before financials of between
EUR3.6 million and EUR16.98 million, and an average of EUR10.4
million, according to AFX.
Yet, despite almost reaching breakeven, the company said it
expects further losses in the early part of 2003.
CEO Christoffer Taxell said, "It is already evident that the
early part of the year will be loss-making and the whole year
difficult."
Finnair had a fourth-quarter earnings before depreciation,
aircraft leasing payments and capital gains (EBITDAR) of EUR47.9
million, or a 9.5% increase, representing a margin of 11.3 pct.
It had sales of EUR429.5 million, or a rise of 13.1. The full-
year profit after financial items rose to EUR54.4 million from
EUR8.9 million. Full year earnings per share were 0.43 euros
from 0.08 and the company proposed a dividend of 0.15 euros from
0.07.
Low turnover in the previous year was blamed partly on the drop
in tourism after the September 11 tragedy. Intensified price
competition and a growth in the relative share of long-haul
traffic also contributed to a fall in passenger traffic unit
revenues of 2.9%.
Net capital gains in the fourth quarter totaled EUR12.5 million,
compared with EUR0.7 million a year earlier.
Finnair, meanwhile, plans to boost competitiveness and expand
capacity on its profitable Asian routes during 2003.
===========
F R A N C E
===========
AIR LIB: Air France to Absorb 1,000 Former Employees
----------------------------------------------------
Transport Minister Gilles de Robien announced that 1,000 of the
3,200 employees of the recently collapsed airline, Air Lib, would
be offered jobs by Air France.
The transport minister said state-owned Air France would hire the
1,000 workers, half of them ground staff, this year.
The announcement was made after a meeting with union leaders and
Air Lib's liquidation order by a French commercial court.
Union leaders, however, urged the government to do more since
1,000 job placements are not enough.
About 300 Air Lib employees earlier protested in silence at
Paris' Orly airport.
Air Lib's battle to stay afloat since it was created in 2001 from
the French operations of collapsed Swissair finally ended when a
French commercial court ordered the liquidation of France's
number two airline.
The carrier filed for bankruptcy after being grounded for failure
to renew its operating license.
Air Lib has flight to Algeria, Cuba, French Antilles, among a
number of European and French destinations. It has 44,000 annual
landing slots at Paris's Orly airport.
CONTACT: AIR LIB
42 Rue F. Forest
Imm. Le Sommet
97122 Jarry-Baie Mahault
Phone: +590-(0)5.90.32.56.00
Fax: +590-(0)5.90.26.64.02
Home Page: http://www.air-liberte.fr/
AIR FRANCE
Zeil 5
60313 Frankfurt am Main
Phone: +49-(0)18 05-83 08 30
Fax: +49-(0)1 80-25 27 76
Homepage: http://www.airfrance.com/
ARCELOR SA: Announces Sale of Galmed to ThyssenKrupp
----------------------------------------------------
Arcelor SA, the world's leading steel maker, will sell Galmed,
supplier of galvanized steel, to ThyssenKrupp AG for an initial
EUR40 million.
The company said in a statement that the sale forms part of the
divestment plan agreed with the EU for a three-way merger, which
created the steel maker.
Following approval of EU on the operation, transfer of additional
Galmed shares to ThyssenKrupp will take place on March 31. "The
final sale price will depend on Galmed's net cash value at that
date, which will be a minimum of EUR10.52 million," Arcelor
added.
It is known that ThyssenKrupp already owns 24.5% of Galmed, while
Arcelor still owns 75.5% of the galvanized steel supplier.
Arcelor is currently freezing investment at four of its least
profitable blast furnaces, including that in Cockerill-Sambre
plant in Liege, facilities in Breme, Germany and Ekostahl,
Germany.
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.
METALEUROP SA: Suspended Shares to Resume Trading in Euronext
-------------------------------------------------------------
Stock market operator Euronext Paris said it would resume trading
of shares in French non-ferrous metal processing group Metaleurop
SA on Wednesday. The shares were suspended for almost two weeks.
A spokeswoman for Euronext Paris said Metaleurop shares have been
deferred since February 6, with the stock last traded at 48
cents.
Earlier, Metaleurop said a general shareholders meeting will be
called before the end of March in order to examine the company's
financial situation. Negotiations on financing the company's
cash flow in 2003 are underway, according to Dow Jones.
The French producer recently decided to stop financing its
Noyelles Godault-based Metaleurop Nord business, subsequently
placing it into receivership on January 28.
In connection, the French ministry launched a judicial inquiry
against the group for suspected fraudulent dealing with company
assets.
A preliminary probe was launched after accounting authorities
indicated that assets sold off by the company might have been
underpriced.
CONTACT: METALEUROP
Maxime ARNAUD
Phone: +33 1 42 99 47 73
Mobile: + 33 6 74 93 21 83
Fax: + 33 1 40 75 09 63
E-mail: maxime.arnaud@metaleurop.fr
Officer, report directly to the Chairman and CEO.
SUEZ SA: Management Committee Director Resigns From Board
---------------------------------------------------------
Francois Jaclot, Director and Vice Chairman of the Management
Committee of SUEZ, has resigned from the Board of Directors and
is leaving the group to pursue a new career path.
His responsibilities Finance, Information Systems, and the
Communications division, will be divided among several senior
executives of the group.
Gerard Mestrallet, SUEZ Chairman and CEO stated: "Since January
1996, Fran‡ois JACLOT has worked close with me and played a key
role in the complete transformation of SUEZ from a diversified
financial holding company into an integrated, international,
industrial Group. I would like to thank him in the name of the
Group for the vital role he has played and to recognize his
outstanding, professional, personal and moral qualities".
Francois JACLOT remains on the Board of Directors of Societe
Generale de Belgique, which is to merge with Tractebel; he will
also carry out various advisory assignments for the Group.
SUEZ SA: Chairman Announces Three Recent Appointments
-----------------------------------------------------
Gerard Mestrallet, SUEZ Chairman and CEO, has made three new
appointments to the management team named to carry out the
Group's 2003-2004 action plan and new strategic direction
announced January 9, 2003.
Gerard Lamarche has been named SUEZ Executive Vice President -
Finance (CFO), with responsibility for financial operations,
treasury, tax issues, management control, planning,
consolidation, and accounting.
Gerard Lamarche (41), a graduate of the University of Louvain,
joined Societe Generale de Belgique in 1988 in management control
In 1991, G‚rard Mestrallet, then CEO of Societe Generale de
Belgique, appointed him to serve as Advisor for Business
Strategy. In this capacity he participated in the strategic
refocusing of SGB within Tractebel.
In 1995, upon Gerard Mestrallet's appointment as Chairman and CEO
of SUEZ, Gerard Lamarche was named Special Projects Advisor in
the Chairman's Executive Office. There he participated in the
merger between Compagnie de Suez and Lyonnaise des Eaux and was
later appointed the new Group's Senior Vice President responsible
for Planning, Control and Accounts Management.
Effective March 2000, Gerard Lamarche was named Director and
Senior Executive Vice President and CFO of Ondeo Nalco.
Alongside the Chairman and CEO of Ondeo Nalco, he successfully
carried out the merger of Nalco, Calgon and Aquazur and
implemented an ambitious cost cutting and debt reduction program
which strengthened Ondeo Nalco's position as world leader in
industrial water treatment
Henry Masson has been appointed Group Senior Vice President for
Organization and Central Services (insurance, internal audit,
purchasing, information systems, logistics) and Chief Risk
Officer. He is responsible in particular for centralizing risks.
Henry Masson (51), a graduate of Ecole nationale d'administration
(ENA), began his career with Caisse des D‚p“ts, then Caisse
Nationale de Pr‚voyance (CNP).
He then took up financial posts with Pechiney and CNP before
becoming Managing Director of Groupe Meeschaert, and later
serving as Chairman of the Executive Committee of SBS-gestion
(Swiss Bank Corporation).
In 1996, Henry Masson joined Compagnie Financiere de Suez as
Chairman and CEO of Banque Monod, later becoming Senior Vice
President for Corporate Internal Audit of Suez Lyonnaise des
Eaux.
Patrick Ouart appointed General Secretary of SUEZ and Group
Ethics Officer
In this capacity, Patrick Ouart is responsible for the Group
Legal Department and for managing the staff of the Group's
deliberative bodies (including the Board of Directors, the
Business Strategy and Compensation Committees, etc.), as well as
for Group Ethics and Corporate Governance issues.
Patrick Ouart (43), a graduate of Ecole Nationale de la
Magistrature, was a magistrate in the Civil Affairs Department of
the Lille District Court and later Technical Advisor in the
Office of the French Prime Minister (Edouard Balladur). He joined
SUEZ in 1998.
These three functions, CFO, General Secretary and Chief Risk
=============
G E R M A N Y
=============
COMMERZBANK AG: Sells Stake in Germany's Largest Brewer
-------------------------------------------------------
Commerzbank AG has sold its 13.84% stake in Germany's largest
brewer Holsten-Brauerei AG to an unidentified foreign investor, a
bank spokesman told Financial Times Deutschland. The bank holds
the stake indirectly through its Pivo unit.
Holsten's supervisory board chairman Christian Eisenbeiss, whom
experts say was willing to sell his 34.54% stake, is believed as
the buyer of Commerzbank's stake.
Around 37% of Holsten shares are in free float or are held by
institutional investors.
According to the report, the buyer plans to divest the stake
himself in the near future, arousing rumors that the whole
company that has a bargain price of between GBP650 million and
EUR700 million, may be sold to a large brewer such as Interbrew
SA, Heineken NV, Anheuser-Busch Cos Inc or Scottish & Newcastle
PLC.
A Holsten spokesman denied that takeover talks were underway.
Commerbank, which recently recorded a pre-tax loss of EUR372
million in its results for financial year 2002, is undertaking a
restructuring aimed at achieving break-even for 2003.
It is planning to divest non-core industrial and financial
holdings to finance possible acquisitions, to save equity and to
concentrate on core activities.
CONTACT: COMMERZBANK AG
Kaiserplatz
60261 Frankfurt, Germany
Phone: +49-69-136-20
Fax: +49-69-28-53-89
Homepage: http://www.commerzbank.com
Contacts: Klaus-Peter Muller, Chairman
Axel Frhr. v. Ruedorffer, Managing Director
DEUTSCHE BA: Parent May Seek Talks With Other Potential Buyers
--------------------------------------------------------------
Deutsche BA's parent company will seek talks with other potential
buyers if budget airline easyJet PLC doesn't exercise its buy
option, the loss-making subsidiary of British Airways said. The
pronouncement follows the earlier collapse of wage talks between
pilots of DBA and easyJet PLC, which puts DBA's existence under
threat.
It is known that easyjet has an option to buy British Airway's
loss-making unit. As a precondition for a take over, it is
trying to reach an accord with employees.
Unfortunately, talks with German pilots union Cockpit over a new
wage contract ended without results because, according to
Deutsche BA, easyJet wasn't willing to accept the pilot union's
preconditions for new working and pay contracts with Deutsche BA.
The pilots union also rejected a proposal from easyJet
management, which continued to require workers to give up all
existing wage contracts and replace them by conditions management
alone dictated.
Deutsche BA said it continues to aim for cooperation with
easyJet, although it will entertain potential buyers if the
airline will not exercise its option to buy at any time up to
April 30 this year. The option is extendable to August 3.
CONTACT: DEUTSCHE BA LUFTVERKEHRSGESELLSCHAFT MBH
Abteilung Kundenbeziehungen
Postfach 23 16 24
85325 Munchen
Fax: 089/975 91 998
EASYJET AIRLINE COMPANY LIMITED
easyLand
London Luton Airport
Bedfordshire LU2 9LS
UK
Home Page: http://www.easyjet.com
DEUTSCHE TELEKOM: Convertible Bond Issuance Oversubscribed
----------------------------------------------------------
Deutsche Telekom AG's mandatory convertible bond issued through
its Dutch subsidiary Deutsche Telekom International Finance B.V.
is more than three times oversubscribed, according to banking
sources.
The Security is mandatorily convertible at a maturity of three
years into common shares of Deutsche Telekom.
The transaction is aimed at raising approximately EUR 2.3 billion
(representing approximately 178 million underlying Deutsche
Telekom common shares at the current share price).
It is also expected to gain Deutsche Telekom significant equity
credit from the rating agencies and help it strengthen its
investment grade rating position.
According to the company: "Upon issuance, under German GAAP, the
instrument will be treated as debt until maturity. However, the
mandatory conversion feature reduces Deutsche Telekom's
accounting net debt at maturity and increases its equity."
"This transaction also complements Deutsche Telekom's on-going
financing activity and the anticipated proceeds from this
transaction further support its liquidity position," it added.
DRESDNER BANK: Chairman to Resign Should Return to Profit Fail
--------------------------------------------------------------
Dresdner Bank chairman Bernd Fahrholz displayed his confidence on
the company's return to profitability this year by offering to
resign if the bank does not achieve its target.
According to weekly Die Zeit, Mr. Fahrholz said "I will put my
head on the block."
Mr. Fahrholz is the only surviving top executive since Allianz
initiated a management shakeup in the bank it acquired in 2000.
Allianz's third quarter results for 2002 partly suffered due to
ongoing losses from the Dresdner unit.
The loss-making bank, which currently struggles with a weak
operating environment, huge loan loss provisions and asset
writedowns, plans to reduce the number of corporate banking
outlets to 70 from the current 130, and trim down the number of
managers to 80 from the current 220.
Last month, Moody's Investors Service downgraded Dresdner Bank's
financial strength ratings to C, to reflect the bank's marginally
higher vulnerability to a potential further deterioration of
asset quality in its financial fundamentals.
CONTACT: DRESDNER BANK AG
Jurgen-Ponto-Platz 1
D-60301 Frankfurt/Main, Germany
Phone: +49-(0) 69/2 63-0
Fax numbers: General enquiries
+49-(0) 69/2 63-48 31
+49-(0) 69/2 63-40 04
EM.TV & MERCHANDISING: Loses Claim Regarding Shares in Speed
------------------------------------------------------------
- Stay of enforcement remains in place
- Sale to subsidiary of Bayerische Landesbank unaffected
Jersey Courts today rejected at first instance EM.TV's claim that
the pledge of its remaining shares in Speed Investments Limited
for the benefit of the Formula 1 banks is invalid. The Company
will now appeal.
For the time being the existing undertakings pursuant to which
the banks undertook not to enforce remain in place. On this basis
EM.TV will be able to pursue the sale of its remaining stake in
Speed to a subsidiary of Bayerische Landesbank, as published in
the ad hoc release of February 18, 2003.
Court proceedings would only be terminated as part of the closing
of such sale.
*****
It was reported last week that EM.TV & Merchandising AG and the
Bayerische Landesbank (BayernLB) reached an agreement in the
dispute over the pledge of EM.TV's shares in the Formula One
racing series. This means that EM.TV sells its shares in Speed
Investments Ltd. amounting to 22.3% to a subsidiary of the
BayernLB with approval of the BayernLB in its capacity as
security trustee.
CONTACT: Frank Elsner
Phone: +49 - 5404 - 91 92 0
Fax: +49 - 5404 - 91 92 29
E-mail: info@elsner-kommunikation.de
HERLITZ: EU Commission Investigates Loan Given to Subsidiary
------------------------------------------------------------
The EU Commission is investigating the EUR1 million loan granted
by the Land of Brandenburg to troubled Falken Office Products, a
subsidiary of German stationery company Herlitz.
The public creditors' wishes to forego their demands despite the
Land of Berlin's agreement to the amortization of an interest-
free loan of EUR3 million aroused the commission's skepticism,
according to the Financial Times Deutschland.
Herlitz filed for creditor protection in Berlin, in April last
year, after failing to negotiate loan extension with banks.
Herlitz's creditors waived EUR40 million US$39 million) in debt.
In a July TCR-Europe, Supthut said the current debt level of the
company is at EUR150 million.
HVB GROUP: Ratings Affirmed After Issuance of Year-End Results
--------------------------------------------------------------
Fitch Ratings affirmed Bayerische Hypo- und Vereinsbank's (HVB)
'A' Long-term, 'F1' Short-term, 'C/D' Individual and '2' Support
ratings. The ratings have a stable outlook.
The action follows the company's reporting of its preliminary
2002 year-end results, which is in line with market expectations.
HVB Group posted an extremely poor net loss of EUR858 million.
In its report, Fitch noted that HVB's EUR1.1 billion fourth-
quarter loss has further eroded the group's now weak capital
base, indicating it will need to see the promised improvement in
this coming through quickly (quarter by quarter) in 2003 if all
ratings are to be maintained.
Fitch acknowledges the company's radical transformation program
for 2002--which includes reduction of total group assets by
EUR100 billion--and affirms that this has the benefit of leading
the company to a more focused business profile.
While recognizing cost containment benefit this year, Fitch says
it remained skeptical about the bank's ability to improve revenue
from a contracted asset base and to curb stubbornly high loan
loss provisions. Fitch considered this in light of the projected
continuing weakness of the German economy.
The rating agency also approves of the bank's plan to suspend
dividends in the belief that "anything more than a nominal
dividend would further erode the weakened capitalization of the
group."
HVB Real Estate Bank's (HVB RE's) 'A' Long-term, 'F1' Short-term
and C/D Individual ratings remain on Rating Watch Negative,
pending analysis of further information on the spin-off
transaction to be disclosed by HVB in the second half of March.
HVB GROUP: Registers EUR858 MM Net Loss in Preliminary Results
--------------------------------------------------------------
Rampl: "Cautious confidence for 2003"
(i) Operational improvements and extensive one-off adjustments
amounting to EUR1.1 billion in Q4 2002 mark financial statements
for 2002 - consolidated pre-tax loss of EUR821 million for 2002
(2001: EUR1,549 million)
(ii) Strong fourth quarter in 2002
- at 1,126m best quarterly operating result before risk provision
in 2002
- Operating income compared with third quarter: up 14.3% to
EUR2,657 billion
- Cost objective clearly beaten (13.8% below Q3)
- Risk provision also on account of one-off general risk
provision compared with Q3: + 7.2 % to EUR1,321 billion
-
- Adjust for special measures in fourth quarter, operating
results and pre-tax result both positive
(iii) Financial statements for 2002
- Pre-tax loss: EUR821 million
- Operating income: EUR10.2 billion (- 9,3%)
- Net trading result: EUR787 million (+ 32,9%)
- Administrative expenses: EUR7,076 billion (- 8,3%)
- No dividend payout for 2002 to ease strain on equity base
- Subordinated capital will be fully serviced
Despite the unsatisfactory results of fiscal 2002 and the
continued weakness of the economy in the current fiscal year, HVB
Group looks ahead with cautious confidence. Board spokesman
Dieter Rampl: "Fiscal 2002 was the worst and most difficult year
in the bank's history, although with our fourth quarter operating
result we succeeded in indicating that the worst is behind us.
Sharply falling expenses and simultaneously rising earnings point
in the right direction. Our regional diversification in Europe is
paying off."
In the fourth quarter HVB Group posted an operating profit before
risk provision of EUR1,126 billion, making it the best quarter of
all of 2002. All earnings components, which in the final quarter
added up to EUR2,657 billion, contributed to this figure, up
14.3% from the previous quarter. Advantageous here was the
balanced regional diversification in Europe and the bank's strong
position in Austria and in the countries of Central and Eastern
Europe. The economies in this area have been more dynamic than in
Germany, thus generating a positive effect on business.
In the last three months net interest income rose 1.8% over the
thirdd quarter to EUR1.663 billion. Net commission income rose
6.0% to EUR658 million. Net trading profit, at EUR294 million,
was well over the
EUR 58 million of the previous quarter. Administrative expenses
were reduced 13.8% compared with the previous quarter to EUR1.531
billion.
Thus the original cost objectives for 2002 were clearly beaten.
Die cost-income ratio improved in the final quarter to just under
60% compared with 76% in Q3.
As the economy remained weak and creditworthiness of many
companies deteriorated, the bank made further provision for
credit risks, raising risk provision in the fourth quarter to
EUR1,321 million (around EUR300 million of which form a one-off
adjustment to the general risk provision - this was due to a one-
time parameter change).
Dieter Rampl: "This adjustment will substantially relieve risk
provision in the current fiscal year."
Without the one-off adjustments to general provisions of some
EUR300 million, the bank achieved a positive result of some
EUR100 million in the fourth quarter. The operating loss in the
final quarter totaled EUR195 million, constituting a substantial
reduction compared with the operating loss of the third quarter,
despite adjustments in risk provision.
In the fourth quarter a number of special charges which added up
to EUR1.1 billion will relieve future results of the bank. Along
with the general provisions we posted to risk provision amounting
to EUR300 million, HVB Group posted a loss of EUR321 million in
net income from investments after writedowns on participation
book values, among other things for the sale of our Brazilian
affiliate at the end of 2002). In addition, non-scheduled
amortization of goodwill was taken totaling EUR180 million, (of
which EUR160 million for Self Trade, EUR21 million for DAB) and
restructuring provisions of EUR286 million for the 2003
transformation program. This will provide relieve for expenses in
the years to come.
2002 Financial Statements
Altogether HVB posted a pre-tax loss of EUR821 million for all of
fiscal 2002. Net loss for the year totaled EUR858 million. The
bank will suspend payment of a dividend for 2002 in order to
relieve the Group's equity base. Risk-weighted assets were
further reduced to EUR341 billion by the end of 2002 (2001:
EUR365 billion). Core Capital ratio according to BIS rules came
to 5.6%.
Board spokesman Rampl: "We have described our goals for 2003. We
are working at full speed at implementing our 2003 transformation
program, which aims at a sustained improvement of results in our
core business and a core capital ratio according to BIS
regulations moving toward 7%. The requisite re-dimensioning with
the reduction of some EUR100 billion in riskweighted assets
including the spin-off of real estate activities is well on the
way. The Management has made all the decisions
for this."
Operating income contracted in 2002 by 9.3% to EUR10,235 billion.
Net interest income shrank 9.3% to EUR6,649bn, in part as we
purposely reduced risk-weighted assets. Net commission income
contracted 6.7% to EUR 2,684 billion as investors remained very
hesitant.
We succeeded in growing net trading profit 32.9 % to EUR787
million. With risk provision in lending operations of EUR3.797
billion, the bank took into account the rising number of
insolvencies in German business and the deteriorating
creditworthiness of many companies. Compared with 2001
administrative expenses were reduced 8.3% to EUR7,076bn at
present.
Bayerische Hypo- und Vereinsbank AG, in other words the Group's
parent bank, will post a balanced result and all subordinated
liabilities including participating certificates outstanding and
hybrid capital will be serviced in full. The adjustments
specified which strain the consolidated statements of HVB Group
do not fully impact the financial statements of the parent bank.
The plans presented to the Supervisory Board at the end of
January for the year 2003 are taking shape. Preparations for
spinning off the bank's real estate financing activities have by
and large been finalized. The bank will announce details on this
at the press conference on March 27, 2003.
CONTACTS: HVB GROUP
Thomas Pfaff
Phone: ++49/89/378-25801
E-mail: thomas.Pfaff@hvb.de
Rene Beutner,
Phone: ++49/89/378-26001
E-mail: Rene.Beutner@hvb.de
KIRCHMEDIA GMBH: Saban Tables Binding Offer for Assets
------------------------------------------------------
U.S. billionaire Haim Saban, in conjunction with an unnamed
partner, has tabled a new and binding offer for the assets of
insolvent German media company KirchMedia, a spokesman for
Kirchmedia said.
The spokesman confirmed that the offer is "materially on a par"
with the offer made by rival bidder Heinrich Bauer Verlag,
although Saban's offer leaves some issues unclear because it does
not identify his bidding partner.
However, French broadcaster TF1 has reportedly said it is
considering a joint bid for certain KirchMedia assets with Saban,
which verifies extensive press speculation.
Both offers will now be examined and compared, with a decision
likely within "one or two weeks," the spokesman further said.
Saban and TF1 presented their offer to KirchMedia creditor banks
Tuesday.
It is known that Bauer and a partner is close to sealing a deal
concerning acquisition of Kirch assets, which include a 52.5%
stake in broadcaster ProSiebenSat.1.
Creditor banks of Kirchmedia include Bayerische Landesbank,
Commerzbank, Bayerische Hypo- und Vereinsbank and DZ Bank.
CONTACT: HAIM SABAN
Saban Capital Group
10100 Santa Monica Blvd.
Los Angeles, CA 90067
Phone: (310) 557-5100
SOCIETE TELEVISION FRANCAISE 1
1, quai du Point du Jour
92656 Boulogne Cedex, France
Phone: +33-1-41-41-25-99
Fax: +33-1-41-41-29-10
Homepage: http://www.tf1.fr
Contacts: Patrick Le Lay, Chairman
Jean-Pierre Morel, Executive Vice-President
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
80333 Munich, Germany
Phone: +49-89-2171-01
Fax: +49-89-2171-23579
Homepage: http://www.blb.de
Contacts: Siegfried Naser, Chairman, Board of
Administration
Werner Schmidt, Chairman
COMMERZBANK AG
Kaiserplatz
60261 Frankfurt, Germany
Phone: +49-69-136-20
Fax: +49-69-28-53-89
Homepage: http://www.commerzbank.com
Contacts: Klaus-Peter Mller, Chairman
Axel Frhr. v. Ruedorffer, Managing Director
DZ BANK
Am Platz der Republik
D-60325 Frankfurt, Germany
Phone: +49-69-74-47-23-82
Fax: +49-69-74-47-67-84
Homepage: http://www.dg.dzbank.de
Contacts: Ulrich Brixner, Chairman
THYSSENKRUPP AG: S&P Downgrades Ratings by Two Notches to BB+
-------------------------------------------------------------
Standard & Poor's has downgraded ThyssenKrupp's previous rating
two notches to BB+ and thus to non-investment grade status. S&P
has also lowered the issue rating for the outstanding
ThyssenKrupp bonds to "BB". ThyssenKrupp sharply criticizes this
decision. The Group does not share S&P's assessment that its
financial situation has deteriorated since its first rating was
issued in summer 2001. The opposite is the case. For example, net
financial payables have been substantially reduced by 4 billion
euros - from 8.7 billion euros at March 31, 2001 to 4.7 billion
euros at September 30, 2002. The Group's gearing target of
approximately 60% was achieved at September 30, 2002, a year
earlier than planned. A further improvement in the gearing ratio
through a further reduction in net financial payables is
targeted. Against this background, S&P's decision is
incomprehensible.
The facts concerning ThyssenKrupp have not changed; the only
thing that has changed is S&P's view of the way it assesses
pension obligations.
Since the beginning of the year, ThyssenKrupp's pension
obligations in Germany have been based exclusively on defined-
contribution schemes. S&P's downgrade will not lead ThyssenKrupp
to pursue models which are disadvantageous - such as coverage by
funds, which would be economically wrong in Germany - and would
result in the destruction of value for the Company, its
stockholders, lenders and ultimately also its employees and
pensioners.
The Group will continue to pursue its strategy and implement
measures to further enhance the value of ThyssenKrupp. The aim
continues to be to focus the Group within its three main business
areas of Steel, Capital Goods and Services and to develop the
segments through active portfolio management. In addition, the
Group aims to achieve continuous productivity improvements of at
least 2 to 3% per year.
CONTACT: THYSSENKRUPP AG
August-Thyssen-Strasse 1
40221 Dsseldorf, Germany
Phone: +49-211-824-0
Fax: +49-211-824-38512
Home Page: http://www.thyssenkrupp.com
Contact:
Dr. Jurgen Claassen, Communications and Central Bureau
Phone: +49 211 824-36001
Gundolf Moritz, Investor Relations
Phone: +49 211 824-36464
===================
L U X E M B O U R G
===================
MILLICOM INTERNATIONAL: Shareholders Approve Reverse Stock Split
----------------------------------------------------------------
An Extraordinary General Meeting was held on Monday, February 17,
2003, at the registered office of Millicom International Cellular
S.A. in Bertrange, Grand-Duchy of Luxembourg. All of the
resolutions on the agenda proposed to shareholders were approved,
including the resolution for a reverse stock split of the issued
shares of the Company, exchanging three existing shares of a par
value of USD 2 each for one new share with a par value of USD 6.
Fractional shares will not be issued as a result of the reverse
stock split. Instead, each holder of a fractional interest of the
Company's shares will receive a cash entitlement.
The Company's shares began trading on a post split basis on the
Luxembourg Stock Exchange on February 17, 2003. The Company's
shares will begin trading on NASDAQ on a post split basis on
Thursday, February 20, 2003. After the split the stock will trade
under the interim symbol of "MICCD" for 20 trading days to assist
in making investors aware of the split. Thereafter, the symbol
will revert to "MICC".
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16 cellular
operations and licenses in 15 countries. Millicom's cellular
operations have a combined population under license (excluding
Tele2) of approximately 360 million people. In addition, Millicom
provides high speed wireless data services in seven countries.
Millicom also has a 6.8% interest in Tele2 AB, the leading
alternative pan-European telecommunications company offering
fixed and mobile telephony, data network and Internet services to
over 16 million customers in 21 countries. Millicom's shares are
traded on the Nasdaq Stock Market under the symbol MICC.
CONTACT: MILLICOM INTERNATIONAL CELLULAR
Marc Beuls, President and Chief Executive Officer
Phone: +352 27 759 101
Andrew Best, Investor Relations
Phone: +44 20 7321 5022
Shared Value Ltd, London
Home Page: http://www.millicom.com
MILLICOM INTERNATIONAL: Advises on Extension of Exchange Offer
-------------------------------------------------------------
Millicom International Cellular S.A., the global
telecommunications investor, on Thursday announces that, further
to its announcement of January 21, 2003, it is extending the
private exchange offer and consent solicitation to holders of 13-
1/2% Senior Subordinated Discount Notes due 2006, or the "Old
Notes", who are not U.S. persons, or who are U.S. persons that
are either "qualified institutional buyers" or "institutional
accredited investors" (as each of those terms are defined under
the Securities Act of 1933, as amended) and who can make the
representations to exchange, upon the terms and subject to the
conditions set forth in the private offering documents, until
5:00 p.m. New York City time on February 28, 2003, unless further
extended by Millicom.
In addition, Millicom confirms it has been notified that an ad
hoc committee of bondholders has been formed and has retained
Houlihan Lokey Howard & Zukin as financial advisers and Orrick,
Herrington & Sutcliffe as legal advisers. Millicom has had
conversations with this ad hoc committee and is extending the
exchange offer and consent solicitation to facilitate the
continued dialogue. The rights of withdrawal for those
bondholders who have already tendered their acceptance to the
exchange offer and consent solicitation shall continue until the
new expiration date in accordance with the terms of the private
offering documents.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell Millicom's securities and is not
being made to, nor will tenders be accepted from, or on behalf
of, holders of Old Notes in any jurisdiction in which the making
of the exchange offers and consent solicitations or the
acceptance thereof would not be in compliance with the laws of
such jurisdiction.
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16 cellular
operations and licenses in 15 countries. Millicom's cellular
operations have a combined population under license (excluding
Tele2) of approximately 360 million people.
In addition, Millicom provides high-speed wireless data services
in seven countries. Millicom also has a 6.8% interest in Tele2
AB, the leading alternative pan-European telecommunications
company offering fixed and mobile telephony, data network and
Internet services to over 16 million customers in 21 countries.
Millicom's shares are traded on the Nasdaq Stock Market under the
symbol MICC.
Lazard is acting for Millicom International Cellular S.A. in
connection with the exchange offer and consent solicitation and
no-one else and will not be responsible to anyone other than
Millicom International Cellular S.A. for providing the
protections offered to clients of Lazard nor for providing advice
in relation to the exchange offer or consent solicitation.
CONTACTS: MILLICOM INTERNATIONAL CELLULAR
Marc Beuls, President and Chief Executive Officer
Phone: +352 27 759 101
LAZARD, New York
Jim Millstein
Phone: +1 212 632 6000
LAZARD, New York
Peter Warner
Daniel Bordessa
Cyrus Kapadia
Phone: +44 20 7588 2721
Shared Value Ltd, London
Andrew Best
Phone: +44 20 7321 5022
Home Page at http://www.millicom.com
=====================
N E T H E R L A N D S
=====================
RELIANT RESOURCES: Agrees to Sell European Business to Nv Nuon
--------------------------------------------------------------
Reliant Resources, Inc. (NYSE: RRI) announced that it has entered
into an agreement in principle under which Reliant Resources will
sell its European business to nv Nuon, a Netherlands-based
electricity distributor. Once the advice of the works council
(Dutch trade employee organization) is received, the companies
will execute a definitive stock purchase agreement, the terms of
which have been agreed.
The approximately $1.3 billion (euro 1.2 billion) transaction
includes cash receipts of approximately $1.2 billion (euro 1.1
billion) at closing and a contingent payment based on future
dividends or liquidation proceeds of NEA, the former coordinating
entity for the Dutch generation sector. The transaction is
subject to Dutch and German competition approval and is expected
to close in approximately six months. As a result of the sale,
the company will recognize a loss of approximately $0.9 billion
of which approximately $0.5 billion relates to impairment of
goodwill, which will be recorded in 2002 results of operations.
The remainder of the loss will be reflected in 2003 results of
operations as a loss on sale. Excluding the loss, the transaction
is expected to be accretive to the company's earnings per share.
Reliant Resources will pay off the euro 600 million bank term
loan at Reliant Energy Capital Europe that matures in March 2003
with proceeds from the sale. Nuon will assume the debt at Reliant
Energy Power Generation Benelux that matures in July 2003.
"We are pleased to have reached this agreement. The sale is an
important step in reshaping the capital structure of the
company," said Steve Letbetter, chairman and CEO. "It will
increase our expected earnings per share going forward, it will
meaningfully reduce our overall debt levels, and it will improve
our liquidity by providing in excess of $500 million of cash
after the repayment of associated debt."
Reliant Resources' European business includes approximately 3,500
megawatts of generating capacity in The Netherlands and
commercial operations related to the generating assets.
Merrill Lynch & Co. and ABN Amro acted as financial advisors, and
Clifford Chance acted as legal counsel to Reliant Resources.
Reliant Resources, based in Houston, Texas, provides electricity
and energy services to wholesale and retail customers in the U.S.
and Europe, marketing those services under the Reliant Energy
brand name. The company has approximately 21,000 megawatts of
power generation capacity in operation, under construction or
under contract in the U.S. and approximately 3,500 megawatts of
power generation in operation in Europe. At the retail level,
Reliant Resources provides a complete suite of energy products to
electricity customers in Texas ranging from residences and small
businesses to large commercial, institutional and industrial
customers. For more information, visit our web site at
http://www.reliantresources.com
CONTACT: RELIANT RESOURCES, INC.
Dan Hannon
Phone: +1-713-497-6149
=========
S P A I N
=========
AVANZIT SA: Gives Telson Creditors Ultimatum to Submit Decision
---------------------------------------------------------------
Avanzit SA has urged the creditors of Telson Servicios
Audiovisuales to give a decision on the sale of the division in
keeping with the schedule of the sell-off.
The company has given the creditors of the media division 48
hours to give a unanimous decision, as Corpfin Capital Asesores,
the venture capital group interested in the unit, now considers
the deadline for formalizing the deal to have expired on failure
of the banks to give their full support.
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 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.
CONTACT: AVANZIT S.A.
Alcala 581
28027 Madrid, Spain
Phone: +34-91-754-67-00
Fax: +34-91-754-67-16
Home Page: http://www.avanzit.com
Contact:
Rafael Martin Sanz, Chairman
BABCOCK BORSIG: Grupo Duro Abandons Plan to Buy Spanish Unit
------------------------------------------------------------
Grupo Duro Felguera dropped plans to acquire the Spanish unit of
Babcock Borsig AG, Babcock Borsig Espana SA, after a 20-day study
on the engineering firm.
A Spanish metal union based in the autonomous region of the
Basque Country had asked Sociedad Estatal de Participaciones
Estatales to find a solvent and credible buyer for the company.
The union is believed to be seeking for an industrial plan that
could guarantee investments in technology and employment.
Babcock Borsig acquired the Spanish engineering company from SEPI
in 2001, agreeing to a business plan, which included investments
of EUR135 million over four years, and maintaining a workforce of
650 for five years.
Babcock Borsig filed for insolvency in July 2002. Dr. Helmut
Schmitz, Krefeld, was appointed as the creditors' trustee for all
of Babcock and 18 other companies.
CONTACT: BABCOCK'S TRUSTEE
Dr. Helmut Schmitz & Thomas Schmitz - Lawyers
Am Flohbusch 1
47802 Krefeld
Phone: 02151 / 965350
Fax: 02151 / 965360
E-Mail: radr.Schmitz@t-online.de
GRUPO DURO-FELGUERA, S.A.
C/ Juan Esplandiu, 13-12a B
Ed. Centro O'Donnell
28007 Madrid
SPAIN
Home Page: http://www.gdfsa.es
Phone: +34 91 5040345/ 91 504 3646
Fax: +34 91 504 6446
Contact:
Ramon Colao Caicoya, Chairman
Florentino Fern ndez del Valle, CEO
Melissa Blanc Diaz, Economic Financial Manager
===========================
U N I T E D K I N G D O M
===========================
ABERDEEN ASSET: Shareholders Approve Disposal of Retail Fund
------------------------------------------------------------
The Board of Aberdeen Asset Management PLC is pleased to announce
that at the Extraordinary General Meeting held Thursday, the
resolution relating to the disposal of the retail fund management
rights by the Company's subsidiary, Aberdeen Unit Trust Managers
Limited, to New Star Asset Management Group Limited, was approved
by shareholders.
CONTACT: ABERDEEN ASSET MANAGEMENT
Martin Gilbert
Phone: 020 7463 6000
GAVIN ANDERSON & COMPANY
Neil Bennett
Lindsey Harrison
Phone: 020 7554 1400
BAE SYSTEMS: New Structure of Contracts to Involve Rise in Cost
---------------------------------------------------------------
The new structure for BAE System's Nimrod and Astute contracts
with the British government will involve cost increases and
further delays, according to Defense Procurement Minister Lord
Bach.
According to AFX, Mr. Bach said: "We have agreed a new structure
for the two contracts which reduces risk, while placing new
incentives on the company to perform. This will, however, involve
a rise in the overall expected cost to completion and further
delays to the in-service dates of the two projects."
On the part of the state, the new agreement will cause an
additional cost of around GBP700 million, though this will not
take effect until 2008 and will be spread over the following
years.
The Ministry of Defense agreed to delay the start of series
production of the Nimrod MRA4 project until it has seen
demonstrated performance from the first three aircraft. It also
agreed to cover the share of the restructuring program by
providing additional funding of around EUR270 million in the
project, though the terms are still subject to final
negotiations.
As for the Astute Class attack submarine project, the government
agreed to increase its funding by around GBP430 million.
With these, Mr. Bach said the government is expecting the Nimrod
project be ready for delivery by 2009, and the Astute project in
service by 2008.
BAE SYSTEMS: Presents Preliminary Results Announcement 2002
----------------------------------------------------------
Highlights
Trading during 2002 has been adversely impacted by lower
contributions from our Programs and International Partnerships
businesses.
North America and the Customer Solutions & Support businesses
again contributed strong performances during the year and
Avionics delivered the expected improved results in the second
half.
The results from Airbus were good despite the difficult
commercial airline market.
The 2002 results in International Partnerships reflected a
difficult trading environment for the Astrium space systems joint
venture.
Two large U.K. Ministry of Defense contracts in Programs, Nimrod
and Astute, have severely impacted the overall results for the
year. However, with the exception of the continued difficult
trading in Astrium, the balance of the company's operations
delivered an anticipated stronger performance during the second
half of the year.
Results in brief
- Order book2 GBP42.5 billion
- Sales GBP12,145 million
- Profit before interest1 GBP1,002 million
- Earnings per share1 17.3p
- Dividend per share 9.2p
- Operating cash inflow GBP136 million
- Net debt GBP1,298 million
1 before goodwill amortization and impairment and exceptional
items (statutory presentation is shown in the consolidated profit
and loss account and see note 5)
2 including joint ventures and after the elimination of intra-
group orders
Outlook
The underlying trading performance for the company's defense
businesses in 2003 is expected to remain broadly in line with
that for 2002 before taking account of the exceptional charges
for the Nimrod and Astute contracts.
Programs performance is expected to be restrained by low export
activity and with production programs still in early phases of
maturity. Restructuring of the Nimrod and Astute contracts is
expected to benefit future performance over the long term and
good sustained growth is anticipated in U.K. defense support
activity and across the company's operations in North America.
Airbus plans a similar volume of activity for 2003, however the
commercial airline market remains difficult to predict.
Commenting on these results:
Sir Richard Evans, chairman, said
'The management team has moved swiftly to address serious issues
in our U.K. Programs. The outlook for our business in the U.K. is
now much improved and complements our strong and growing position
in the U.S. market.'
Mike Turner, chief executive, added
'The actions taken to address the challenges in the U.K. Programs
business and strength elsewhere in the company provide a strong
foundation for future growth.'
2002 Preliminary results statement
In recent years BAE SYSTEMS has made good progress in building
its position as a prime contractor and growing its capabilities
towards the higher value systems sector of the defence market on
both sides of the Atlantic. We see the company's systems skills
as a clear differentiator as customers place greater emphasis on
network enabled capabilities.
Profit before interest1 reduced to GBP1,002 million from GBP
1,260 million in 2001, on reduced sales of GBP 12,145 million,
down 7.6% on 2001.
The reassessment of the Astute and Nimrod programs has resulted
in an exceptional charge of GBP750 million for the year.
Earnings per share1 for 2002 are down 26% to 17.3p compared to
2001. The Board is recommending a final dividend of 5.5p per
share, bringing the total dividend for the year to 9.2p. At this
level, the annual dividend is covered 1.9 times by earnings1 and
interest cover1 remains strong at 4.9 times (2001 7.1 times).
Net debt at the year end was GBP1,298 million, reflecting
operating cash flow generation in the second half of the year.
Year-end net debt represents 22.9% (2001 12.5%) of shareholders'
funds.
We have reached agreement to restructure the Nimrod and Astute
fixed-price design and development and production contracts with
new terms.
The U.K. Ministry of Defense (MoD) and BAE SYSTEMS have
recognized that these programs have been impacted by factors that
neither party could have envisaged at the time that the contracts
were entered into. In retrospect, it is now clear that the
original contracting and pricing arrangements built excessive
risks into both programmes.
The contracts will now be restructured to replace the current
overall firm price arrangements with a new 'target price
incentive fee' contract for design and development. The design
and development phase will include build of the first of class
Astute boat and, in the case of Nimrod, the first three aircraft
for development and test. The production phases will be priced at
a later date.
In line with the agreements, a provision is required of œ500m for
Nimrod and œ250m for the Astute program to recognize fully the
residual design and development risk on these contracts.
We have reviewed the underlying causes of the issues in our U.K.
Programs business. As a result, a series of actions are underway
to improve application and adherence to existing processes and
the management of key program risks. The Board, with external
assistance, will monitor the implementation and delivery of these
actions.
Although U.K. program prime contracting issues dominated much of
2002, the company has achieved a number of successes. Our
Customer Solutions & Support business has performed well and
remains a key element of our growth strategy. In particular, we
have been successful in winning industrial support business for
the MoD Defense Logistics Organization (DLO) and the U.K. armed
forces. This is expected to remain an important growth activity
for the company. In addition, Airbus is performing well in a
difficult market.
2002 has also been a formative year for the Eurofighter Typhoon
program as it moved into production. Typhoon is a valuable
program for the company through both the aircraft systems
integration and airframe manufacture activity in Air Systems and
the very substantial electronic systems contributions of our
Avionics business. Typhoon, together with participation in other
aircraft programs, is expected to generate future growth in our
Avionics business.
We were pleased to be selected in January 2003 as prime
contractor for the next generation U.K. aircraft carrier program.
This valuable and prestigious program will be an important
building block in the relationship and terms of trade between the
company and the U.K. government as both customer and partner.
BAE SYSTEMS has also continued to build its position in the US,
the world's largest, and growing defense market. We have
established a strong trading position with the Department of
Defense (DoD) and other agencies, and we want to continue to
build on this mutually advantageous and profitable relationship.
We are proud to be recognized as a high quality performer in the
U.S. defense industry.
Our ambitions in the U.S. are for further growth. We plan to grow
organically and to continue to look for appropriate acquisitions
where they meet our criteria for increased shareholder value as
well as being a good strategic fit.
After 33 years with the company, Sir Charles Masefield will be
retiring from the Board on 28 February 2003 but will remain an
employee of the company, on a part time basis, continuing in his
current overseas representational and ambassadorial role. Sir
Robin Biggam and Keith Brown will be retiring at the conclusion
of this year's Annual General Meeting. Sir Peter Mason will
replace Sir Robin as the Board's nominated senior independent
director. In addition, the Board will be forming separate
nomination and remuneration committees, to be chaired by Sir
Peter Mason and Professor Sue Birley respectively. The Board is
looking to appoint an additional non-executive director to chair
the Board's Audit Committee in succession to Keith Brown. The
company's chairman, Sir Richard Evans, will be retiring at next
year's Annual General Meeting. Sir Peter Mason will lead the
search for his successor.
We are committed to achieving an acceptable return for
shareholders and continuous improvement in the capability and
quality of our systems and support for our customers worldwide.
We believe that the actions taken to address the challenges in
the U.K. Programs business and the strength elsewhere in the
group provide a strong foundation for future value growth.
Looking forward to 2003 and beyond we expect that we will benefit
from sustained growth in our U.K. defense support activity and
U.S. businesses along with partnering and program opportunities
in Europe. All this will consolidate our position as one of the
world's leading defense systems companies.
To see consolidated financial statements:
http://bankrupt.com/misc/BaeSystems.pdf
CONTACT: BAE SYSTEMS
Farnborough, Hampshire GU14 6YU, UK
Phone: +44 (0) 1252 384605
Fax: +44 (0) 1252 383947
Homapge: http://www.baesystems.com
Contact:
Phil Soucy, Corporate Communications
Phone: +44 (0) 1252 384797
E-mail: phil.soucy@baesystems.com
Richard Coltart, Corporate Communications
Phone: +44 (0) 1252 384875
E-mail: Richard.coltart@baesystems.com
BAE SYSTEMS: Executive Chairman Denies Management Shakeup
---------------------------------------------------------
BAE Executive Chairman Sir Richard Evans said that, contrary to
press reports, there had been no motions to kick him or any other
non-executive member from the defense group's management.
While admitting that the company had made mistakes, Sir Richard
denied having known of any such move "either formally or
informally," according to Times Online. Regarding pressures for
board changes, he said: "No, nothing. No question of it."
He also denied contemplating on stepping down from his job during
a low point in MoD's relationship with the City last year.
According to the report, many believe that the relationship could
only be mended by a shakeup of the management, which one analyst
considered "an old boy's club," another "too weak to stand up to
Evans."
One non-executive told The Times that there was also a question
mark over the competence of Mr. Turner and of the quality of the
tier of management below the board.
Earlier, BAE Systems senior non-executive director Sir Robin
Biggam dismissed reports that a group of non-executive directors
are planning to launch a shakeup in the company's management
saying the non-executive directors of the company have full
confidence in BAE's current management team.
CONTACT: Dennis Burton, C4ISR
Phone: +44 (0) 1202 408512
Mobile: +44 (0) 7801 712587
BAE SYSTEMS
Farnborough, Hampshire GU14 6YU, UK
Phone: +44 (0) 1252 384605
Fax: +44 (0) 1252 383947
Home Page: http://www.baesystems.com
BLAZEPOINT GROUP: Informs of Liquidation Changes in FTSE Indices
----------------------------------------------------------------
Following the suspension and proposed liquidation of Blazepoint
Group PLC (UK), FTSE announces the following change:
INDEX CHANGE EFFECTIVE FROMSTART OF TRADING
FTSE AIM
Blazepoint Group (UK 3065608)
will be deleted 24 February 2003
at 0p.
Please note: in accordance with the FTSE AIM ground rules, if a
company is restored to trading on AIM it will be re-included to
the FTSE AIM index.
For index related enquiries:
CONTACT: Client Services in UK
Phone: +44 (0) 20 7448 1810 and
Client Services in US:
Phone: +1 212 825 1328
or +1 415 445 5660
Client Services in Asia Pacific:
Phone: +852 2230 5800 or +65 6223 3738.
E-mail: info@ftse.com
CHRISTIAN SALVESEN: Poor Trading Prompts Another Profit Warning
---------------------------------------------------------------
Christian Salvesen PLC, the European logistics company, provides
the following update on trading since the Group's interim results
statement issued on December 3, 2002, and announces that it has
undertaken a review of certain aspects of the Group's activity.
Background
Over the past two years, Christian Salvesen has been operating in
an environment in which cost increases in certain important
elements of its business, most notably in the form of increased
driver costs, higher insurance premiums, and the costs associated
with increased congestion, have proved progressively difficult to
recover from customers through price increases. Whilst
significant progress has been made in winning new business, in
increasing efficiencies and in lowering the Group's cost base,
the benefits of these actions have been insufficient to offset
the inflationary effect of the cost increases, the impact of
which has been magnified by the difficult prevailing economic
conditions.
Despite these challenges, some 80% of the Group's business by
turnover is performing well and generating expected returns.
However, the balance of the Group's operations, specifically the
German Industrial business and parts of the U.K. Food and
Consumer and U.K. Industrial businesses, are producing
disappointing results.
The impact on the Group's performance is such that the Board
currently expects profits for the year to 31 March 2003 to be
approximately 20% below current market expectations. The Group's
preliminary results for the year will be announced in June 2003.
Food and Consumer Division
In the Food and Consumer Division, the Continental European
businesses - in France, Benelux, Italy, Spain and Portugal - have
performed marginally ahead of expectations, and are demonstrating
their continued resilience despite severe pricing pressures.
It is in the U.K. food and consumer business, traditionally our
strongest business, where a shortfall has arisen. As previously
stated, profits in the second half were to be impacted by the
start-up of the new cold store sites at Bedworth and Easton.
However, the start-up at Easton was delayed in the important run-
up to Christmas, leading to higher than anticipated levels of
disruption in both the warehousing and transport operations. In
addition, and despite the Group's strong market position, pricing
pressures continue to intensify, and since the Christmas period,
volumes have softened with slower than expected re-stocking
taking place at certain sites. As a result of all these factors,
full-year profits from the U.K. food and consumer operations will
be markedly lower than anticipated.
Industrial Division
In the Industrial Division, the French and Iberian businesses
have continued to trade broadly in line with expectations.
Darfeuille continues to contribute a resilient performance in a
softening market and our previously announced restructuring
programs for Gerposa have progressed well, with the business
still on target to approach break-even by the year-end.
In Germany, we have continued to implement the previously
announced restructuring plans. However, due to the continued
worsening of the economic environment, the measures previously
outlined are proving insufficient to turn the performance around.
The loss for the full year is now expected to be similar to that
for 2002.
In the U.K., the lower manufacturing output and a more extended
shutdown than anticipated by many customers over the Christmas
period have impacted the scale of the upturn in the business's
performance. As stated in December, the expectation of an
improved second half was dependent on our seeing the benefits of
the 5-point action plan to improve the profitability of this
business. However, the continuing industrial climate is hampering
management's ability to achieve all aspects of this plan and to
extract the anticipated benefits in full. Therefore, whilst the
business has performed slightly better in the second half, the
generation of acceptable returns will not be achieved without an
acceleration and intensification of the previously outlined
action plans.
Business Review
In light of the challenging market conditions, the Board has
rapidly undertaken a business review across the Group's
underperforming operations.
This process has involved a fundamental review of the overall
operational and management structure of the U.K. businesses to
optimise the focus of the transport, warehousing, and support
services operations. The objective is to integrate the U.K. Food
and Consumer and U.K. Industrial businesses into a single
functional structure and, to facilitate this, we will recruit
externally a senior executive to take responsibility for the
Group's U.K. operations.
In the U.K. businesses, we are implementing an accelerated
program of exiting from insufficiently profitable business,
coupled with significant cost reduction initiatives. We are also
conducting a full review of the strategic options available to
the Group in the German industrial market.
Dividend
In January 2003 the Group paid an unchanged interim dividend of
2.65 pence per share. At the present time, the Board intends to
recommend the payment of a final dividend, although this is
unlikely to be at the level of the previous year.
Edward Roderick, Chief Executive of Christian Salvesen plc, said:
"The continued underperformance in certain key business areas is
disappointing in the extreme, and is something that we are in the
process of rectifying through immediate and decisive action.
"Our reputation for operational effectiveness amongst our
customer base remains undiminished. With the exception of our
Industrial business in Germany, our continental European
businesses are showing resilience and are performing broadly as
expected.
"However, the German operations and parts of our U.K. business
need more radical action than has been taken to date if we are to
generate the returns that our shareholders expect. We are
addressing this vigorously."
CORDIANT COMMUNICATIONS: To Sell Assets to Prop up Balance Sheet
----------------------------------------------------------------
(i) 2002 performance in line with market expectations
(ii) Cost savings of GBP45 million exceed previous estimate of
GBP27 million.
(iii) Focus on core Bates Group businesses, representing 85% of
Group revenues
(iv) Disposal of non-core businesses: considerable expressions of
interest
(v) Disposals to achieve significant debt reduction;
renegotiating covenants
In line with the strategic decision to focus its business on the
Bates Group announced with the Group's interim results last
September, the Board of Cordiant announces the proposed disposal
of certain non-core businesses which will strengthen the Group's
balance sheet. These disposals will focus the Bates Group into a
single, integrated communications offering comprising Bates
Advertising, marketing services network 141, branding and design
group Fitch and specialist network Healthworld.
2002 PERFORMANCE
The Board also confirms that the Group's headline unaudited
operating results for the year ended December 31, 2002 are in
line with market expectations. Operating profits for the year
ended December 31, 2002, before exceptional items and goodwill
amortization, are expected to be GBP37 million. This result was
achieved despite revenues significantly reduced by 11% to GBP533
million, due to the continuance of extremely difficult market
conditions and key account losses in the US. The Group's
operating margin improved from 6.0% in 2001 to 6.9% in 2002 as a
result of strong cost control, particularly in the second half.
This aggressive cost containment was central to the Group's
restructuring strategy announced in September that has now been
completed. The annual cost savings achieved of over GBP45
million significantly exceed the initial estimate of GBP27
million, and position the Group well for the future. The cost
saving initiative has resulted in a larger than anticipated 2002
exceptional charge, now expected to be approximately GBP45
million. These charges are fully covered by the Group's current
financial arrangements.
A full review of the carrying value of goodwill is currently
being undertaken and the Board anticipates that an exceptional
non-cash charge for the impairment of goodwill in the region of
GBP155 million will be included in the 2002 accounts. Gross
borrowings for the Group at December 31, 2002 were GBP249 million
and average gross borrowings for the year were GBP220 million.
Average net borrowings for the year were GBP172 million. The
Group operated within the terms of its financial covenants with
respect to the year ended December 31, 2002.
DISPOSALS
With its cost restructuring satisfactorily completed, the Group
is now embarking on a program of disposals of certain non-core
businesses both to enhance the operations of its core business
and to strengthen its balance sheet. The core Bates Group
businesses, which account for approximately 85% of total
revenues, performed solidly in 2002 versus the prior year and,
despite difficult market conditions, enjoyed their best new
business gains for over two years in the final quarter of 2002.
The businesses being considered for disposal by the Group,
assuming satisfactory terms can be agreed, are its 77% stake in
Scholz & Friends, Financial Dynamics International and, in line
with other global marketing communications groups, a majority
interest in the Group's Australian operations. The Group has
already received significant interest in all of these assets.
Therefore the Board is confident that transactions can be
completed that will be in the best interests of shareholders,
clients and staff. The Board will also consider the exercise of
its option to sell its 25% stake in the Zenith Optimedia Group in
January 2004.
BORROWINGS
These proposed disposals will strengthen the Group's balance
sheet considerably by reducing the Group's debt. The terms
agreed with the Group's principal lenders early in 2002 included
progressively more demanding financial covenants, in anticipation
of the then widely predicted recovery in the advertising and
marketing services sector. Accordingly, in the light of the
continuing adverse market conditions, and bearing in mind the
effect of the planned disposal program, Cordiant has commenced
the renegotiation of certain of its financial covenants (but not
the total amount of its facilities) from March 31, 2003.
Although at an early stage, the Board expects that these
discussions will be concluded on a satisfactory basis.
David Hearn, Chief Executive of Cordiant said:
'Market conditions remain depressed and we see little prospect of
revenue growth this year. We've aggressively driven costs down
by a further GBP45 million into 2003 and are now focussing the
Group on its core strengths. This will also rebuild our balance
sheet. We are creating a leaner, stronger Group better placed to
win revenue in the future'.
CONTACT: CORDIANT COMMUNICATIONS
Phone: +44 (0)20 7262 4343
Contact:
David Hearn, Chief Executive
Andy Boland, Finance Director
College Hill
Phone: +44 (0)20 7457 2020
Alex Sandberg
Adrian Duffield
CORUS GROUP: Additional Job Cuts in U.K. Operation Likely
---------------------------------------------------------
Up to 1,500 jobs in Corus Group's U.K. steel making operations
may have to be shed as the company strengthens its financial
position.
According to the Financial Times, the company is working on the
plans following deterioration in the company's financial position
in recent months. This would not involve closures of U.K. steel
making sites, but it might entail phasing out of some product
lines to bring more focus to its steel operations in the U.K. and
boost profitability
Part of the strategy is the possible scrapping of a GBP543
million deal to sell a large part of its aluminum production
assets to Pechiney due to opposition from the supervisory board
of its Dutch counterpart, according to the report.
The company, though, issued a statement saying it is fully
committed to the sale of the asset, and to show its intention of
pushing with the plan, it confirmed it hired McKinsey & Company
to look at various aspects of the firm's strategy.
The Dutch half of the steel business insisted that the U.K.
division stem its losses before it provides additional help into
its counterpart.
The first half of last year saw Corus' core carbon steel business
losing GBP110 million in the U.K., and gaining GBP29 million in
Netherlands.
Corus is also currently renegotiating a GBP1.2 billion loan that
accounts for more than half of its borrowings.
ZYZYGY PLC: Adviser Resigns, Refinancing Talks Ongoing
-------------------------------------------------------
Cable and satellite company Zyzygy PLC announced in a statement
that "the company has been informed that Deloitte & Touche
Corporate Finance has resigned as nominated adviser to Zyzygy
with immediate effect".
In consequence of the resignation of Delloite & Touche, trading
on AIM was temporarily suspended, pending appointment of a
replacement nominated adviser.
Zyzygy said it is currently in advanced negotiations with a third
party to recapitalize and refinance the company, which has
extremely limited cash reserves and is seeking further investment
to meet current and ongoing liabilities.
As part of these negotiations, the company said it is discussing
the appointment of a new nominated adviser.
CONTACT: ZYZYGY PLC
Swiss Centre 6th Floor,
10 Wardour St,
London,
W1D 6QF,
United Kingdom
Phone: (020) 7758 3200.
Fax: (020) 7758 3240
*************
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Copyright 2003. All rights reserved. ISSN 1529-2754.
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