/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030303.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, March 3, 2003, Vol. 4, No. 43 Headlines ********* * B E L G I U M * ASSURANCES GENERALES: Under Formal Inquiry on Misuse of Contract * C Z E C H R E P U B L I C * UNION BANKA: Demands Additional Acquisition Funding From CNB UNION BANKA: Political Leaders Analyze Bank's Collapse * F I N L A N D * TELIASONERA: Pays No Group-bonus in Cash Transaction Bonus * F R A N C E * ARCELOR SA: Reports Pro Forma Net Loss of EUR121 Million ARIANESPACE: Profit Forecast for 2002 Slightly Higher SUEZ SA: Sells Stakes in Axa, Total Fina Elf for EUR320 Million * G E R M A N Y * COMMERZBANK AG: Chairman Rules Participation in Bad Bank Plan DEUTSCHE TELEKOM: Third Tranche of Shares Under Legal Attack HVB: Analysts Say Bond Issue Inevitable, Even as Chair Plays Coy IKB DEUTSCHE: Fitch Downgrades Class C Notes From 'BB+' to 'BB' * I T A L Y * FIAT SPA: Car Unit's Survival Hinges on Toro, FiatAvio Sale * N E T H E R L A N D S * KONINKLIJKE AHOLD: U.S. Probe Sparks Inquiries Across Atlantic KONINKLIJKE AHOLD: Amsterdam Announces Suspension of Trading KONINKLIJKE AHOLD: Supervisory Board Proposes Hommen as Member KONINKLIJKE AHOLD: Completes Investigation Into Disco Argentina KONINKLIJKE AHOLD: Holzer & Holzer Announces Class Action Lawsuit KONINKLIJKE AHOLD: The Pomerantz Firm Charges Securities Fraud * N O R W A Y * PETROLEUM GEO-SERVICES: Posts Net Loss of US122.5 MM in Results PETROLEUM GEO-SERVICES: NYSE to Suspend Trading, Remove From List * P O L A N D * ELEKTRIM SA: Elektrim Telekomunikacja Sells Fixed Line Companies * S P A I N * SOL MELIA: 'BBB-' Rating Placed on CreditWatch Negative * S W I T Z E R L A N D * ABB LTD: Denies Cutting Price of Asset to Speed Up Divestment ABB LTD.: Registers Full-year Loss of US$ 787 Million ZURICH FINANCIAL: Issues Results and Progress on Restructuring ZURICH FINANCIAL: A.M. Best Comments on 2002 Year-End Results * U N I T E D K I N G D O M * ABBEY NATIONAL: Posts GBP984 Million Loss Before Tax in Results HUNTERS OF BRORA: Petitions to Liquidate After Venture Failed PIZZAEXPRESS: Rival Challenges Johnson's Takeover Offer WESTON MEDICAL: Faces Uncertain Future, Likely to Liquidate ============= B E L G I U M ============= ASSURANCES GENERALES: Under Formal Inquiry on Misuse of Contract ---------------------------------------------------------------- A Brussels judge has placed Assurances Generales de France's Belgian unit as well as AGF Belgium's Chairman Louis de Montferrand under formal investigation for possible misuse of a life insurance contract. A spokesman for the prosecutor's office in Belgium said the move was part of an inquiry into an alleged EUR223 million tax-evasion scheme. Prosecutors claimed that the company avoided payment of a 25% tax by investing money under the life insurance contract in Luxembourg instead of Belgium, and transferring profits to a shell company in the Duchy. Belgian prosecutors, who estimate the loss to taxpayers at some EUR55.75 million, said the maximum penalty AGF could face is liquidation of its Belgian unit. But the probe does not necessarily mean either will face charges, according to Dow Jones. The Belgian unit, which is part of German bancassureur Allianz AG, said it stopped selling the Luxembourg-registered life insurance product after it found out its illegality under the Belgian law. =========================== C Z E C H R E P U B L I C ============================ UNION BANKA: Demands Additional Acquisition Funding From CNB ------------------------------------------------------------ Union Banka claimed the Czech National Bank owes it CZK1.7 billion as a result of the bank's acquisition, which was completed in mid-1990, CNB Governor Zdenek Tuma said. According to Prague Business Journal, CNB contributed CZK1.8 billion for the acquisition but UB and its new owner, Italian Invesmart, have been claiming since September 2002 that the amount is insufficient to defray the costs. The bank's financial troubles, caused by significant numbers of non-performing loans, have been apparent since the mid-1990s. Its acquisition of Invesmart was widely hoped to help restructure the Union Banka's balance sheets. Union Banka closed its branches throughout the Czech Republic, suspended payments and restricted the use of its credit cards on Friday after the bank admitted it had financial difficulties. Its supervisory board recently dismissed CEO Radovan Vavra and board of member Roman Truhlar. The board named Roman Mentlik and Michal Gaube new members of the board of directors. It is still in search for the replacement of Mr. Vavra. UNION BANKA: Political Leaders Analyze Bank's Collapse ------------------------------------------------------ Political leaders are questioning the role of Czech National Bank in the closure of Ostrava-based Union Banka, following its admission of insolvency on February 21. According to the Prague Post, Prime Minister Vladimir Spidla believes CNB should have acted earlier and revoked UB's license before the beginning of March. The bank closed after the Finance Ministry denied it more than GBP650 million of funding. Controlling owner Invesmart estimates the bank's solvency needs at around CZK4.5 billion (US$155 million). Pavel Sobisek, chief economist at HVB Czech Republic bank, said it is "theoretically" possible to save the bank through a capital injection from Invesmart, but the question is on whether investors confidence can still be repaired after the shutdown of the branches. The report offered the acquisition of another bank as a possible rescue for Union Banka. It carried a report in newspaper Mlada fronta Dnes that Raiffeisenbank, UniCredito, Citibank and others are considering a purchase. Analysts believe the closure would not have a noticeable effect on the country's economy as the bank only accounts for approximately 1.5% of the nation's retail banking market. ============= F I N L A N D ============= TELIASONERA: Pays No Group-bonus in Cash Transaction Bonus ---------------------------------------------------------- TeliaSonera has decided that the previously announced Telia Group bonus for the year 2002 of maximum 30 MSEK will not be paid. However, payment of the Sonera cash transaction bonus of 73 MSEK is paid. In the light of the large negative result for TeliaSonera, following the large write-downs during the previous year, the Board of Directors and the CEO have judged that payment of the Telia Group bonus cannot be motivated. For this reason, no payment of this bonus will made within Telia, neither to the CEO nor to the other employees included in this scheme. For a number of years, the Telia employee remuneration system has comprised both fixed and variable salary components. As far as the variable components are concerned, they are payable according to results and are intended as a stimulant towards extraordinary and prioritised achievements. The goals for these variable salary components are agreed in advance and well documented for each individual. They comprise both 12-month financial goals and individual achievement goals, which are regarded as essential for long-term positive profitability development. A similar system has been used in Sonera. Evaluation of the variable salary components for the year 2002 is not affected by the decisions regarding the Telia Group bonus or the Sonera cash transaction bonus. In addition to the fixed and variable salary components, there has been a group-wide incentive plan - the Group bonus - in place in Telia since 2001. The 2002-year goal for this plan comprised the planning and execution of the merger between Telia and Sonera, and in addition how well this activity was carried out in parallel with the development of Telia's business performance. The CEO of Telia evaluates whether or not any payment will be made. The maximum payment according to plan is a total of 30 MSEK. Within Sonera this group wide plan corresponds to a warrants program. The question of the Sonera cash transaction bonus has also been evaluated. This evaluation established that during the spring 2002 Sonera made legally binding undertakings to pay a cash transaction bonus in those cases where individuals included in the scheme were still employed during the offer period and for a time thereafter and that the merger between Telia and Sonera actually took place. Therefore the cash transaction bonus, amounting to a total of 73 MSEK is paid. Telia has no comparable cash transaction bonus. "After the large losses we showed for 2002, it would have been unreasonable to make the Group bonus payments", comments TeliaSonera's President and CEO Anders Igel. " The payment of Sonera's transaction bonus is strictly in line with contracts made when Sonera was a separate company, but in the light of the losses we have presented I would have preferred that no such payment would be made. It is now time to look ahead and we are presently preparing a new long-term incentive plan to replace the previous systems that have existed within Telia and Sonera." =========== F R A N C E =========== ARCELOR SA: Reports Pro Forma Net Loss of EUR121 Million -------------------------------------------------------- -- Synergies higher than expected -- Net dividend of 0.38 per share The Board of Directors met on February 27, 2003 under the chairmanship of Joseph Kinsch, reviewed the consolidated accounts and approved the Company's accounts for 2002. The Board of Directors will propose to the shareholders Meeting a net dividend of 0.38 euro per share. Dividend will be paid on May 22nd, 2003. Despite a difficult environment for the world economy, which was characterized by a pronounced growth slowdown, the Group realized a good gross operating result neighboring two billion euro. This significant improvement is essentially due to cost reduction progress and more particularly to synergies which at 190 million represent almost the double of the target set by the industrial plan at the time of the merger. At December 31, 2002, Pre-Tax amounted to 393 million euro. Pro forma consolidated net income was - 121 million. It corresponds to a consolidated net income adjusted for exceptional non cash items. Key Figures of the Group In millions of euro Pro forma - unaudited* 2001*** 2002 -------------------------------------------------------------- Revenue 27,512 26,594 -------------------------------------------------------------- EBITDA 1,379 1,978 -------------------------------------------------------------- EBIT - 200 780 -------------------------------------------------------------- Pre-Tax - 681 393 -------------------------------------------------------------- Net income Group share - 339 - 121 -------------------------------------------------------------- EPS** - 0.70 - 0.25 -------------------------------------------------------------- ** in euro *** as published in 2002 Revenue for the Group in 2002 amounted to 26,594 million euro compared to 27,512 in million for 2001 or a 3.34% decrease. Geographical breakdown was as follows: 75% in the EU, 12% in North America, 5% in South America and 8% in the rest of the world. Gross operating income amounted to 1,978 million or 7.4% of net sales compared to 1,379 million or 5% of net sales in 2001. It shows, additionally the positive effect of price increases, which took place quarter after quarter, the significant cost cutting realization. Operating income was 780 million euro or 2.9% of revenues compared to -200 million in 2001. Even though hit by one off non cash exceptional items (185 million of impairment), operating income shows significant improvement. After financial interest expense of 464 million euro, a positive contribution from associates of 77 million and taxes of 462 million, net income (Group share) was - 121 million. Taxes essentially comprise intangible assets write down (deferred taxes accounted for in some of the Group's subsidiaries) and constitutes a non recurring non cash item. At December 31, 2002, cash generated by operations was 1,800 million euro. Capital expenditure was 1,415 million euro, or a slight decrease compared to 2001 (1,590 million). Net Financial Indebtedness In millions of euro December 31, December 31, Pro forma - unaudited* 2001 2002 ----------------------------------------------------------------- Shareholders' equity ** 8,819 8,058 ----------------------------------------------------------------- Net financial debt 6,510 5,993 ----------------------------------------------------------------- Net financial debt/shareholders' equity** 0.74 0.74 ---------------------------------------------------------------- ** including minorities and residual negative goodwill. At December 31, 2002 net financial debt was 5,993 million euro or a decrease of 517 million compared to December 31, 2001. This debt reduction is attributable to a good control of working capital requirements and capital expenditure. At December 31, 2002 the net financial debt/shareholder's equity/ (including minorities and residual negative goodwill) was 0.74 (0.74 at December 31, 2001). Stability of this ratio is due to the Brazilian real devaluation impact on Group equity. Breakdown of Revenue, EBITDA and EBIT by Sector 2001 ** ------------------------------------------------------------ In million euro Pro Forma Non audited Revenue EBITDA % EBIT % ------------------------------------------------------------- Flat Carbon Steel 13,572 570 4.2 - 67 -0.5 ------------------------------------------------------------- Long Carbon Steel 3,963 595 15.0 367 9.3 ------------------------------------------------------------- Stainless Steel 4,240 - 53 -1.3 - 677 -16.0 -------------------------------------------------------------- Distribution Processing and Trading 9,541 292 3.1 186 2.0 -------------------------------------------------------------- Other activities 1,251 - 1 -0.1 14 1.1 -------------------------------------------------------------- Intra Group sales - 5,055 ns -- ns -- -------------------------------------------------------------- 2002 -------------------------------------------------------------- In million euro Pro Forma Non audited Revenue EBITDA % EBIT % -------------------------------------------------------------- Flat Carbon Steel 13,222 925 7.0 216 1.6 -------------------------------------------------------------- Long Carbon Steel 4,256 613 14.4 430 10.1 -------------------------------------------------------------- Stainless Steel 4,248 200 4.7 45 1.1 -------------------------------------------------------------- Distribution Processing and Trading 9,444 319 3.4 209 2.2 -------------------------------------------------------------- Other activities 910 - 79 -8.7 - 120 -13.2 -------------------------------------------------------------- Intra Group sales - 5,486 ns -- ns -- -------------------------------------------------------------- ** as published in 2002 Revenue for Flat Carbon Steel amounts to 13,222 million euro in 2002 compared to 13, 572 million in 2001 or a slight decrease (- 2.6%) reflected by lower average selling prices than in 2001 as first quarter registered low historical prices, which only started to increase as of second quarter. Compared to 2001 shipped volumes have only increased by 0.3%. The significant improvement of gross operating income (925 million euro in 2002 compared to 570 million in 2001) is due to a better optimization of the mills but mainly to significant cost cutting. Operating income was 216 million euro in 2002 compared to a loss of 67 million in 2001, a significant progression despite the impact of one off exceptional item (asset impairment of 185 million). For Long Carbon products, the revenue increase of 7.4% is attributable to the integration of new companies as well as to a sharp increase in shipped volumes (+4.2%). Average selling prices are slightly down (- 2.4%), prices in Northern Europe being hit by an increased weakness of the construction markets. Revenue for Stainless Steel remain stable in 2002 at 4,248 million. However, at 200 million euro for 2002, gross operating income shows significant improvement compared with 2001 which was a loss of 53 million. This progress is essentially due to cost cutting and to synergies, shipped volumes increasing by 1.3%. Operating income is positive compared to a 677 million loss incurred in 2001 essentially due to one off exceptional items (asset impairment) Revenue for the Distribution, Processing and Trading sector is down by 1% compared to 2001 and reflects a reduction of shipped volumes. Gross operating income increased in 2002 (319 million compared to 292 million in 2001) and translates clearly price increases for 2002 as well as significant cost reduction. Revenue for other activities was 910 million euro compared to 1,251 million in 2001. Gross operating income was a loss of 79 million compared to a loss of 1 million in 2001. This sharp decrease, being essentially due to the decline of technological markets hitting copper foil activities. Results of the parent company At December 31, 2002, results of the parent Company were positive at 260 million euro. This result essentially comes from dividends paid by Group subsidiaries. (Code Sicovam: 5786; Code Bloomberg: LOR FP; Code Reuters: CELR.PA) PROSPECTS The year 2003 has started amidst political and economical uncertainties which should weigh on investment and therefore on industrial activity. In such a context the Group nevertheless confirms the strategic objectives defined at the time of the merger, the implementation of synergies and debt reduction. In an environment developing in very different ways, the Group is positive about a rigorous approach, in terms of appropriate supply following demand and margins evolution. For 2003 the Group expects improved results considering higher than 2001 average selling prices, mastering of inventories and important progress in terms of cost reduction and synergies. The organization of the Group is in place and integration is viewed as a success. * Pro forma unaudited financial disclosures are meant to simulate the effects of the merger as of February 28, 2002 for periods of time starting prior to this date. CONTACT: ARCELOR Investor relations: Martine Hue Phone: +352-4792-2151 00-800-4792-4792 +33-1-41-25-9898 ARIANESPACE: Profit Forecast for 2002 Slightly Higher ----------------------------------------------------- Arianespace's profit for 2002 will be slightly up from earlier forecasts, the rocket company's chairman, Jean-Yves Le Gall, told the French daily, La Tribune. His pronouncement is understood to mean Arianespace would post an operating loss of around EUR45 million, down from an initial forecast last February of EUR50-60 million. He also said sales will be around EUR1 billion this year, down from EUR1.4 billion in 2002. "If all goes well,... this year we will make 5 Ariane V launches. So we will see lower sales than the previous year," he said. The chairman also reaffirmed his commitment to return to profitability this year saying, "It is clear that the current situation, with 3 years of losses (2000-2002) cannot continue." During his earlier forecast, Mr. Le Gall said the private European company would have to provide for the failure of the new Ariane-5ECA rocket that exploded shortly before takeoff in December 2002. The blast destroyed a nearly half-a-billion investment. Arianespace launched 12 rockets last year. CONTACT: ARIANESPACE Boulevard de l'Europe BP 177 91006 Evry-Courcouronnes CEDEX France Phone: +(33) 1 60 87 60 00 Fax: +(33) 1 60 87 63 04 Home Page: http://www.arianespace.com/ Contact: Jean-Marie Luton, Chairman Jean-Yves Le Gall, Chief Executive Officer SUEZ SA: Sells Stakes in Axa, Total Fina Elf for EUR320 Million --------------------------------------------------------------- Debt-laden water company, Suez SA, has made good its promise to sell stakes in insurer, Axa SA, and oil company, TotalFinaElf SA, to help trim down its huge EUR27 billion debt, Bloomberg said Friday. The sale grossed EUR320 million for the company, according to the report, with Salomon Smith Barney and Morgan Stanley subscribing and reselling the shares. Citing Clyde Carter, Bloomberg said Salomon purchased 1.7 million TotalFinaElf shares and resold them at 119.50 euros each, which was 1.6% below the stock's closing price in Paris. Mr. Carter, who manages US$1.8 billion for Banc One Investment Advisors in Columbus, Ohio, also said Morgan Stanley gobbled up 10.9 million Axa shares and resold them at 10.70 euros each. This resale price is 2.6% below the closing price in Paris, he said. Mr. Carter, who was offered shares, said he didn't buy any. The two sales were not entirely unexpected. Chief Financial Officer Francois Jaclot even bared the separate sales on January 10 when he appeared on Bloomberg Television. Still, Alfredo Rotemberg, who co-manages US$320 million Armada International Equity Fund, could not help but be surprised. "It was a fire sale," described Mr. Rotemberg of the sale. "Why are they selling at these prices? They can [still] raise cash," he told Bloomberg in an interview. Suez Spokeswoman Catherine Guillon did not return the calls of Bloomberg, while Morgan Stanley Spokeswoman Melissa Stonberg and Salomon Smith Barney spokesman Duncan King declined to comment. Axa is Europe's second-biggest insurer and TotalFina is the world's fourth-largest publicly traded oil company. Both companies are based in Paris, as is Suez. The company expects to book a loss of about EUR900 million in fiscal 2002. It plans to sell further assets, which may include its 37% stake in M6- Metropole Television SA, France's second-largest private broadcaster, French newspaper Le Figaro recently reported. ============= G E R M A N Y ============= COMMERZBANK AG: Chairman Rules Participation in Bad Bank Plan ------------------------------------------------------------- Commerzbank AG chairman Klaus-Peter Mueller is not interested in joining Deutsche Bank's idea of putting up a "bad bank" in Germany to help banks cope with non-performing loans. He said he has nothing against a bad bank, only that it is not something Commerzbank itself needs or would be interested in. "I have never called out to the state, and I'm not going to now," Mr. Mueller told Financial Times Deutschland. According to the proposal pushed by Deutsche Bank AG chairman Josef Ackermann in a meeting with German chancellor Gerhard Schroeder two weeks ago, a state-funded bad bank would assume responsibility for banks' non-performing loans to relieve the pressure on their balance sheets. The idea is patterned from a similar bank established in Sweden in the early 1990s. 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 TELEKOM: Third Tranche of Shares Under Legal Attack ------------------------------------------------------------ Deutsche Telekom and the German government are facing legal action in relation to the 2000 listing of a third tranche of shares in the company, according to Die Welt. The report says German law firm Binz & Partner has lodged a complaint with the state prosecutor's office in Bonn alleging deception in the transaction. The action reportedly follows a report by state-run ARD television last week alleging that Deutsche Telekom and the finance ministry may have deceived shareholders by failing to disclose financial risks related to the company's listing. Earlier, TCR-EU run a report of finance ministry expert Professor Wolfgang Gerke saying on ARD's 'Report Mainz' program that shareholders may have been deceived about the financial status of the company at the time. A member of the panel of experts set up by the ministry, Mr. Gerke said he has copies of letters written by former CFO Joachim Kroeske addressed to the company's management board in the latter part of 1999 and confidential documents from the supervisory board. The company denies Mr. Gerke's claim. In an interview with AFX recently, Deutsche Telekom spokesman said: "We are emphatically denying these allegations. The prospectus for the 2000 listing contained the latest and important information at that time." The DSW Association for Protection of Shareholders is looking into the matter, according to the Handelsblatt business daily. CONTACT: DEUTSCHE TELEKOM AG 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 HVB: Analysts Say Bond Issue Inevitable, Even as Chair Plays Coy ---------------------------------------------------------------- For the first time, HVB Group admitted last week to mulling a large bond issue to shore up its balance sheet, the Financial Times said recently. In a recent letter addressed by Chairman Dieter Rampl to his staff, he acknowledged the rumors that the bank is indeed considering the idea, but insisted that the group's capital base has not yet gone below regulatory minimum. In fact, he said, the core capital ratio is still 5.6%, above the legal requirement of 4%. But analysts interviewed by the Financial Times believe the bond issue, a classic backdoor route into the equity market, is inevitable, even calling it "just a matter of time." "It might even be a good idea to be the first in the queue," said one, adding that other German banks might soon have to follow suit. There are now mounting speculation that the bank is poised to issue a EUR4 billion mandatory convertible bond. Analysts say they wouldn't be surprised if this happens, although they doubt the bank could raise such an amount considering that its market capitalization has now fallen to just EUR4.5 billion. They also believe the bank will have difficulty selling assets at book value given the current market climate. In January, Mr. Rampl unveiled ambitious plans to improve HVB's capital strength and return it to profitability by shifting more than EUR100 billion in risk-weighted assets off its books. The paper said the bulk of the reduction -- EUR57 billion -- will come from spinning off the groups' real estate arm. The rest will be made up from the disposal of businesses, sales of holdings and the securitization of loans. Analysts, however, say HVB will have to find an additional EUR1.5 billion in capital to support the property spin-off alone, or risk depleting the group's already weakened capital base further. IKB DEUTSCHE: Fitch Downgrades Class C Notes From 'BB+' to 'BB' --------------------------------------------------------------- Fitch Ratings, the international rating agency, has downgraded the rating of the Class C notes of IKB Deutsche Industriebank Aktiengesellschaft AG - Credit Linked Notes from 'BB+' to 'BB'. The ratings of the class A and B tranches have been affirmed at 'AAA'. The class D notes are not publicly rated. The notes were issued by IKB Deutsche Industriebank AG. The Class A and B notes are backed by credit linked certificates of indebtedness issued by Kreditanstalt fur Wiederaufbau (KfW). The Class C and D notes are unsecured The notes assume the economic risk of a static amortizing portfolio with a current balance of USD 217.1 million, containing loans and unsecured bonds to medium to large sized corporates in North America. The transaction has a scheduled maturity in November 2008, with a clean-up call when the balance of the portfolio is less than 10% of the original principal balance. Fitch has carried out a review of the transaction and its performance to date. As of the last reporting date in January 2003 there were six credit events totaling USD20.57 million in the portfolio, one of which, with a nominal value of USD1.55m has been worked out yielding a recovery rate of 35%, which has been allocated to the first loss piece. There are also two likely credit events in the portfolio totaling USD12.1m. Though relative credit enhancement is building continuously due to the amortization of the underlying portfolio and the class A notes, it has not leveled out the reduced credit support due to the realized and expected losses to be absorbed by the class D notes. Fitch's rating action reflects expected losses determined by taking the lower of the market values and initial recovery rate assumptions for the credit events and likely credit events. ========= I T A L Y ========= FIAT SPA: Car Unit's Survival Hinges on Toro, FiatAvio Sale ----------------------------------------------------------- The first order of business for newly installed Fiat Chairman Umberto Agnelli should be the quick sale of insurance unit, Toro Assicurazioni SpA, and aeronautics subsidiary, FiatAvio, says Bloomberg. Umberto, whose appointment on Friday marks the return of an Agnelli in Fiat's management, needs to raise as much as EUR5 billion if he wants to save the group's struggling auto business. That money could only come with the sale of the two units, says Bloomberg. According to some analysts interviewed by the news agency, Toro and FiatAvio could fetch as much as EUR4 billion. It is rumored that Snecma SA, a French state-owned defense company, is interested in making an offer for FiatAvio, with or without its Italian counterpart Finmeccanica SpA. Bankers also told Bloomberg recently that U.S. buyout funds Carlyle Group Inc. and Blackstone Group LP are similarly interested. Munich Re, the world's biggest reinsurer and Groupama SA, a French mutual insurer, on the other hand, are allegedly eyeing Toro. So is, financier Emilio Gnutti's Italian investment company, according to Bloomberg. Fiat has declined to comment on possible bidders. "These assets need to be sold as quickly and in the best way possible to put off a capital increase," Meliorbanca's Massimo Nibbi said in an interview with Bloomberg. Other analysts, meanwhile, said the asset sales will only provide temporary solution to Fiat's woes. "They'll get the money for now, but the real problem is going to be getting through the next 18 months," Andrea Pasetti of Capitalgest told Bloomberg in a separate interview. The company was expected Friday to report a loss of EUR3.1 billion -- wider by almost seven percent from the last fiscal year -- based on Bloomberg's survey of seven analysts recently. Losses at the auto unit, however, should be a lot lesser, after the company cut costs and laid off 8,000 workers. The company, however, was not expected to report progress on talks about its three-year alliance with General Motors Corp., the world's biggest carmaker. Fiat's top executives met with their counterparts at General Motors two Sundays ago, but came home empty-handed. The negotiations have stalled over an option Fiat has to force General Motors to buy the rest of its car unit from 2004. General Motors wants to cancel the option in return for giving Fiat funds. Fiat's creditors want to keep the option, Bloomberg says. ===================== N E T H E R L A N D S ===================== KONINKLIJKE AHOLD: U.S. Probe Sparks Inquiries Across Atlantic -------------------------------------------------------------- Investigations into allegations that retail giant, Ahold, may have breached disclosure rules and indulged in insider trading, with Dutch corporate watchdog, Sobi, becoming the latest to call for a probe. According to the Financial Times, the watchdog filed last week a case with the Dutch public prosecutor, on suspicion that Cees van der Hoeven, who resigned as Ahold chief executive last Monday, was "an accomplice to embezzlement" or "handling stolen property." The paper says the accusation concerns the relationship between Ahold and Velox Retail Holdings, its South American joint venture partner, and the method by which certain share transactions were conducted last year. A spokesman for the public prosecutor said his office is now studying the charges. He declined to say whether or not a criminal suit is forthcoming. Last week, the U.S. Attorney's office for the Southern District of New York launched an investigation into the U.S. Foodservice subsidiary of Ahold upon the request of its CEO Jim Miller and CFO Michael Resnick. The probe is in relation to an alleged accounting irregularity in the subsidiary. The Securities and Exchange Commission of the U.S. has also launched a separate probe into the matter, the paper says. In Netherlands, the Authority for Financial Markets (the securities regulator in the country) and Euronext Amsterdam have also jumped into the bandwagon and are believed to be conducting their respective inquiries. KONINKLIJKE AHOLD: Amsterdam Announces Suspension of Trading ------------------------------------------------------------ Market Supervision Amsterdam announces a trade suspension in the following security: Name of the company: Knock-in Reverse Exchangeable Securities on ordinary shares of Koninklijke Ahold N.V. 2003 per 28 February 2005 (As, If and When issued) ISIN code: NL0000113371 Trading group: N0 Date: Thursday 27 February 2003 As from: 09.00 hrs Reason: ABN Amro Bank announced to withdraw the offer and will not proceed to listing. Note: As a consequence all trades will be cancelled and not be cleared and settled. KONINKLIJKE AHOLD: Supervisory Board Proposes Hommen as Member -------------------------------------------------------------- The Ahold Supervisory Board has announced its intention to nominate Jan Hommen as one of its members. The nomination of the current Vice Chairman and Chief Financial Officer of Royal Philips Electronics will be proposed at the next Annual General Meeting of Ahold Stockholders, to be held on May 13, 2003, in The Hague. Hommen (59) is currently Vice Chairman and CFO at Philips, a position to which he was appointed in April 2002. Hommen joined Philips in April 1997 as Executive Vice President and CFO. Previously, he was Executive Vice President and CFO of Alcoa, the Aluminum Company of America, a position he held since 1991. Hommen is Chairman of the Supervisory Board of the Maastricht Academic Hospital and Chairman of the "College van Beheer" of the Philips Pension Fund. He is also a member of the Supervisory Board of Atos Origin and TNT Post Group N.V. The Ahold Supervisory Board currently consists of Henny de Ruiter (Chairman, formerly Managing Director of the Royal Dutch Petroleum Company); Roland Fahlin (formerly Chairman of the ICA Group); Sir Michael Perry (formerly Chairman of Unilever plc); Dr. Cynthia Schneider (formerly U.S. ambassador to The Netherlands); Bob Tobin (formerly Chairman of Ahold USA); Lodewijk de Vink (formerly Chairman of the Warner-Lambert Company) and Karel Vuursteen (formerly Chairman of Heineken N.V.). KONINKLIJKE AHOLD: Completes Investigation Into Disco Argentina --------------------------------------------------------------- No material impact on Ahold's financial results New management appointed Ahold announced on February 24 that it has been investigating, through forensic accountants, the legality of certain transactions at Ahold's Argentine subsidiary, Disco, and the accounting treatment thereof. While Ahold believed that there was no material impact upon the company, it was unable to comment further until the investigation was complete. This work has now been concluded and the investigation shows that there will be no material impact on Ahold's financial results. Ahold also announces that the Chief Executive Officer and the Chief Financial Officer along with two other directors have resigned. Two new directors have been appointed by Ahold to the Disco Board. Alfredo Garcia Pye, currently Country Manager of Ahold's Santa Isabel operation in Peru, has been appointed Chief Executive Officer. Pieter de Nooij, currently member of Ahold's Latin America Support Group, has been appointed Chief Financial Officer. Both appointments are effective immediately. An Ahold team from the Netherlands has been installed at Disco to offer active support to the company, enforce controls and ensure compliance with the Ahold Business Principles. KONINKLIJKE AHOLD: Holzer & Holzer Announces Class Action Lawsuit ----------------------------------------------------------------- Holzer & Holzer announced that it has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Koninklijke (translated as Royal) Ahold, N.V. (Ahold or the Company) publicly traded securities during the period between March 6, 2001 and February 21, 2003, inclusive (the Class Period). A copy of the complaint filed is available from the Court or by contacting Holzer & Holzer (toll-free) at (888) 508-6832 or by sending an e- mail to mfistel@holzerlaw.com Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements and filed annual reports with the SEC which described the Company's increasing income and financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its income by improperly including far higher promotional allowances -- provided by suppliers to promote their products -- than the company actually received in payment; (ii) that the Company's Disco unit had engaged in certain transactions which were possibly illegal and were improperly accounted for; (iii) that the Company was experiencing a slowdown in consumer demand and that, contrary to defendants' representations, the Company's financial performance was not "very solid" and its fundamental business was not really "quite robust"; (iv) that, contrary to defendants' representations, the Company was having difficulty integrating its numerous acquisitions; (v) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (vi) as a result of the foregoing, the Company's financial statements issued during the Class Period were materially false and misleading. On February 24, 2003, before the opening of regular trading, Ahold shocked the market by announcing that it: (i) would be reducing its earnings expectations for 2002; (ii) would be restating its financial results for 2000, 2001 and its interim results for 2002, primarily due to overstatements of income, which may exceed $500 million, related to promotional allowance programs at U.S. Foodservice in the past two years; (iii) will deconsolidate its interests in three subsidiaries -- ICA Ahold, Jeronimo Martins Retail and Disco Ahold International Holdings; and (iv) has been investigating the legality of certain transactions and their accounting treatment at the Company's Argentine subsidiary Disco; and (v) as a result of all of this, the Company's CEO and CFO, defendants van der Hoeven and Meurs would be resigning. As a result, shares of Ahold's American Depositary Receipts fell $6.53 per share, or more than 61%, to close at approximately $4.16 per share, a far cry below their Class Period high of $32.65 per share, on extremely heavy trading volume. If you bought Ahold publicly traded securities between March 6, 2001 and February 21, 2003, inclusive, you may, no later than April 28, 2003, move the Court to serve as a lead plaintiff in the action. In order to serve as a lead plaintiff, however, you must meet certain legal requirements. If you have any questions about your rights with respect to this lawsuit, you may contact Holzer & Holzer, Michael I. Fistel, Jr., Esq. (toll-free) at (888) 508-6832, or inquire via e-mail to mfistel@holzerlaw.com Holzer & Holzer has substantial experience representing investors in securities fraud class action lawsuits such as this. Holzer & Holzer is located in Atlanta, GA, but represents investors in securities class action lawsuits throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call the Firm. CONTACT: HOLZER & HOLZER Michael I. Fistel, Jr., Esq. Phone: (888) 508-6832 E-mail: mfistel@holzerlaw.com KONINKLIJKE AHOLD: The Pomerantz Firm Charges Securities Fraud -------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomerantzlaw.com)has filed a class action in the United States District Court for the District of Maryland, case number 03-CV-530, against Royal Ahold NV (Royal Ahold or the Company), two of the Company's top officers/directors, and the Company's independent auditor, Deloitte & Touche Registered Accountants, on behalf of investors who purchased the American Depository Receipts of Ahold during the period between May 15, 2001 and February 21, 2003, inclusive (the Class Period). The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading statements concerning the Company's publicly reported earnings. In particular, defendants overstated operating earnings by $500 million in fiscal years 2001 and 2002 by recognizing more money in promotional allowances provided by suppliers to promote their goods than that Company actually received. Before the market opened on February 24, 2003, Ahold announced that it will restate its financial statements for fiscal year 2001 and the first three quarters of fiscal year 2002 to correct the inappropriate accounting for discounts from suppliers at its U.S. Foodservice division, which is headquartered in Columbia, Maryland. The Company also announced that its Chief Executive and Chief Financial Officers, defendants Cees van der Hoeven and Michael Meurs, respectively, had been fired and that several U.S. executives had been suspended. In addition, the Company announced that it has uncovered "questionable" transactions in its investigation of certain transactions and the accounting treatment thereof at its Argentine subsidiary, Disco. In response to the Company's announcement, Ahold's ADRs fell $6.52, or 61%, to $4.16 on volume of 16,197,900 units traded. The Securities & Exchange Commission has launched an investigation of the Company's accounting practices. If you purchased the ADRs of Royal Ahold during the Class Period, you have until April 28, 2003 to ask the Court to appoint you as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, or if you would like to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4- POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number. The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. Local Counsel is Beins, Goldberg & Gleiberman of Washington, D.C. CONTACT: POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP Andrew G. Tolan, Esq. Phone: (888) 476-6529, (888) 4-POMLAW E-mail: agtolan@pomlaw.com =========== N O R W A Y =========== PETROLEUM GEO-SERVICES: Posts Net Loss of US122.5 MM in Results --------------------------------------------------------------- Petroleum Geo-Services ASA announced today its 4th quarter and year end 2002 results. (In millions of dollars) Q4 2002 Q4 2001 2002 2001 Revenues $262.0 $254.5 $994.0 $885.0 Operating profit (loss) 3.5 (28.6) (629.5) 189.3 Net income (loss) (122.5)(104.9) (1,392.1) 4.5 EBITDA, as defined (A) 126.2 118.8 458.8 433.8 CAPEX (B) (7.2) (30.9) (60.9) (185.3) Investments in multi-client (C) (34.5) (59.4) (190.4) (230.2) Cash flow defined as (A+B+C) $84.5 $28.5 $207.5 $18.3 Q4 operations: - Higher portion of contract seismic - Higher level of pre-funding - Lower throughput on Varg, Foinaven and Banff - Lower revenues on Varg due to tail end production of Varg field 2002 Operations: - Overall excellent safety and regularity performance - Increase in and focus on post capex cash flow - Increased portion of contract work and higher pre-funding on multi-client 2002 - a challenging year: - Continued overcapacity in seismic markets - Veritas merger plans terminated - Atlantis sale delayed (concluded February 2003) - Steep downgrades in financial ratings and in the share price New Board, new CEO, new CFO Substantial write downs and impairments in Q3 A comprehensive financial restructuring / refinancing effort initiated and in progress. To see Company's Financial Results: http://bankrupt.com/misc/PetroleumGeoServices.pdf CONTACT: Sverre Strandenes, SVP Corporate Communications Dag W. Reynolds, Director European IR Phone: +47 6752 6400 Suzanne M. McLeod, U.S. IR Phone: +1 281-589-7935 PETROLEUM GEO-SERVICES: NYSE to Suspend Trading, Remove From List ----------------------------------------------------------------- Petroleum Geo-Services ASA (PGS) announced that it has been informed by the New York Stock Exchange (NYSE) that the American Depositary Shares of Petroleum Geo-Services ASA and the Petroleum Geo-Svcs AsaTrust I -- tickers symbol PGO and PGOPRA - are suspended. PGS has been in continuous dialogue with the NYSE regarding the market price of its ADRs since they fell below $1.00. In the Company's Q3, 2002 Earnings Release PGS informed the market that it had fallen below the NYSE's continued listing criteria relating to the minimum share price, and indicated that under NYSE rules within six months from NYSE notice it would be required to bring the ADR price and average ADR price above $1.00 over a 30 day trading period. The NYSE decision was reached because PGO remains below the NYSE's minimum security price criterion as PGO's average ADR price has been less than $1.00 over a consecutive 30- trading - day period and has recently been trading at abnormally low levels, closing at $0.31 on February 25, 2003. Additionally, in view of today's earnings announcement, the Company has now also fallen below NYSE continued listing standards as the Company's average global market capitalization over a consecutive 30 trading-day period is less than $50,000,000 and its total stockholders' equity is less than $50,000,000. Petroleum Geo-Services is a technologically focused oilfield service company principally involved in geophysical and floating production services. PGS provides a broad range of seismic- and reservoir services, including acquisition, processing, interpretation, and field evaluation. PGS owns and operates four floating production, storage and offloading units (FPSO's). PGS operates on a worldwide basis with headquarters in Oslo, Norway. For more information on Petroleum Geo-Services visit http://www.pgs.com =========== P O L A N D =========== ELEKTRIM SA: Elektrim Telekomunikacja Sells Fixed Line Companies ---------------------------------------------------------------- The Management Board of Elektrim SA announces that it has been informed by Elektrim Telekomunikacja Sp. z o.o. that on February 27, 2003 an agreement was signed with EVL Poland Sp. z o.o. providing for the sale of the fixed-line telephony companies: Telefonia Polska Zach�d Sp. z o.o. and Elektrim TV-Tel Sp. z o.o. The value of the transaction is PLN 73,000,000. ========= S P A I N ========= SOL MELIA: 'BBB-' Rating Placed on CreditWatch Negative ------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BBB-' long-term corporate credit rating on Spain-based hotel company Sol Melia S.A. (Sol Melia) on CreditWatch with negative implications, reflecting the concern that, following weak 2002 financial results, the company will find it challenging to restore its credit measures to investment grade levels in the medium term. Although the company's European operations recorded a limited decline in revenue per available room in 2002, Sol Melia nevertheless continued to suffer from its exposure to the North African (mainly Tunisia) and Latin American tourism markets, which were affected by weak customer demand owing to economic and geopolitical problems in those regions. In the face of weakening hotel demand worldwide and its exposure to volatile emerging markets (which account for about 30% of EBITDA), the company has implemented cost cutting measures, reducing operating costs by about EUR30 million in 2002, and has started to divest from loss- making and underperforming affiliate hotels, mostly in Tunisia. "While these measures should help improve Sol Melia's profitability, it remains highly unlikely that the company will be able to restore its credit measures to levels more commensurate with an investment grade rating by the end of 2003, primarily due to the continuing uncertainty regarding the pace of economic recovery in Europe and the Americas," said Standard & Poor's credit analyst Melvyn Cooke. Sol Melia recorded revenues and EBITDA of ?1.1 billion and ?233 million, respectively, for full-year 2002. While the company's revenues and cash flows suffered only a moderate decrease compared with 2001, its high operational gearing had a significant negative impact on operating margins and free cash flow, resulting in a higher than anticipated leverage, with lease adjusted net debt to EBITDA of 4.9x. Sol Melia's lease adjusted credit measures remain very weak for the rating, with EBITDA net interest coverage of 3.9x and funds from operations to net debt at about 15% in 2002. Standard & Poor's expects any potential downgrade to be limited to one notch, subject to a review of the company's strategy to strengthen its balance sheet and reduce leverage. Standard & Poor's expects to resolve the CreditWatch placement after meeting with the company and reviewing its business and financial strategies during the next few weeks. ===================== S W I T Z E R L A N D ===================== ABB LTD: Denies Cutting Price of Asset to Speed Up Divestment ------------------------------------------------------------- ABB Ltd. did not cut the price of its oil, gas & petrochemical division in order to speed up its divestment, according to a company spokesman. He called the article published in the Swedish daily Dagens Industri "pure speculation," saying "concrete divestment talks are ongoing, but a price is not discussed in public." The statement is in response to a report of the paper that says the sale price of the division has been cut to SEK10 billion from SEK15 billion in order to speed up its divestment. ABB attributed its US$787 million full-year loss in part to the disposal loss on the sale of Structured Finance in 2002, and operational losses in businesses to be sold in 2003, including the Oil, Gas and Petrochemicals division. A statement from the company cites Jurgen Dormann, ABB chairman and CEO, as saying "the company was in talks with several potential buyers to sell the Oil, Gas and Petrochemicals division and remained on target to sell most of the Building Systems business in 2003." CONTACT: In Switzerland Cheryl Sunderland Nicole Seiler Phone: + 41 43 317 3824 E-mail: nicole.seiler@ch.abb.com ABB Asea Brown Boveri Ltd Value Services Affolternstrasse 44 P.O. Box 8131 CH-8050 Zurich Switzerland Phone: +41 43 317 7111 Fax: +41 1 311 98 17 Norwalk, United States John Chironna Asea Brown Boveri Inc. 501 Merritt 7, P.O. Box 5308 Norwalk, Conn.06856-5308, U.S.A. Phone: +1 203 750 7743 Fax: +1 203 750 2262 ABB LTD.: Registers Full-year Loss of US$ 787 Million ----------------------------------------------------- ABB's core divisions, Power Technologies and Automation Technologies, showed a strong performance in 2002, but the ABB Group reported a net loss for the full year as a result of asbestos charges and losses in discontinued operations. Core businesses: Q4 2002 EBIT up 38 percent; full-year 2002 EBIT up 4.3 percent; 2003 EBIT expected to increase more than 20 percent Discontinued operations, asbestos provisions result in net loss Charge Q402 Q401 Local Nominal currencies 4501 4893 -8% -14% 5288 5530 -5% -10% 0 -438 n.a n.a -838 -980 n.a n.a. Charge 2002 2001' Local Nominal currencies 18, 112 19,672 -8% -10% 18,295 19,382 -6% - 8% 336 179 88% 82% -787 -691 n.a n.a. * Earnings before interest and taxes 1 Restated to reflect the move of businesses to discontinued operations, which do not contribute to revenues or EBIT Net debt reduced by US$ 1.5 billion - on target Group EBIT margin at 1.8 percent - above 1.5 percent target Full-year loss (US$ 787 million) and weaker cash flow (US$ 126 million) on asbestos provisions and losses in discontinued operations The core divisions, created last year to sharpen the company's focus, showed a strong fourth quarter, with combined earnings before interest and taxes (EBIT) growing 38 percent. For the full-year 2002, the ABB Group posted EBIT of US$ 336 million, up from US$ 179 million the year before. As a percentage of revenue, the EBIT margin reached 1.8 percent, above the target of 1.5 percent for the year. On a comparable basis, the company cut its net debt by US$ 1.5 billion in 2002. "It has been a difficult year, but we've put the worst behind us," said J�rgen Dormann, ABB chairman and CEO. "In 2002, we secured a new credit facility that gives us financial flexibility until the end of 2004. We are putting the asbestos issue to rest and divesting non-core businesses. Our core businesses are performing well. I'm confident we can deliver on our growth targets and return to profitability in 2003." For the full-year 2002, the core divisions' orders were down 2 percent, while revenues edged 1 percent higher. The two divisions reported full-year revenues of US$ 15.6 billion and EBIT of US$ 946 million. Power Technologies division increased revenues 3 percent and EBIT 9 percent. Automation Technologies division had flat revenues and saw a slight rise in EBIT (up 1 percent). ABB Group orders for the full year, including non-core activities and corporate, were down 8 percent in nominal terms, at US$ 18.1 billion, and revenues decreased 6 percent to US$ 18.3 billion. Losses in ABB's non-core businesses and discontinued operations offset the core divisions' improved performance, resulting in a net loss for the Group of US$ 787 million. Interest and other finance expense for 2002 included a gain of US$ 215 million, arising from the accounting treatment of the convertible bonds that ABB issued in May 2002. The net loss was mainly due to asbestos provisions, the disposal loss on the sale of Structured Finance in 2002, and operational losses in businesses to be sold in 2003, including the Oil, Gas and Petrochemicals division (all included in discontinued operations). The Building Systems business (reported in non-core activities) also showed a loss. Net debt ABB cut net debt by US$ 1.5 billion on an adjusted basis. Before adjusting for the transfer of Oil, Gas and Petrochemicals to discontinued operations, and accounting for the asbestos settlement, net debt was cut to about US$ 2.6 billion from the previously reported US$ 4.1 billion at the end of 2001. After these adjustments, net debt was US$ 3.3 billion at December 31, 2002, compared to US$ 4.3 billion a year earlier. Divestments ABB sold most of its Structured Finance business in 2002 to GE Commercial Finance and realized cash proceeds of about US$ 2.3 billion. The company also sold its metering business and a number of other smaller operations. Dormann said ABB was in talks with several potential buyers to sell the Oil, Gas and Petrochemicals division and remained on target to sell most of the Building Systems business in 2003. The company has also said it plans to sell its Equity Ventures participations and the remaining parts of the Structured Finance business. The businesses to be divested employ some 30,000 people. Cost reduction ABB said more than 1,300 projects to reduce costs had been identified in its "Step Change" program to lower the cost base by an amount equivalent to 4 percent of revenues - about US$ 800 million - by mid-year 2004. The cost savings projects, including 10,000-12,000 job reductions, are underway in all countries. As a result of these job reductions and 30,000 employees leaving ABB in connection with divestments, ABB is expected to employ fewer than 100,000 people by mid-2004, down from 139,000 today. Cash flow and equity For the full-year 2002, cash flow from operations was US$ 126 million, as strong cash flow in the core businesses was offset by asbestos payments and weaker cash flow from businesses in discontinued operations. Equity was down to US$ 1,052 million, mainly as a result of fourth quarter asbestos provisions and other losses from discontinued operations. The company expects a small decrease in under-funded pension liabilities for 2002. Group outlook From 2002 through 2005, ABB expects a compound average annual revenue growth of about 4 percent. For 2003, ABB aims to achieve an EBIT margin of 4 percent. By December 31, 2003, total debt is expected to be reduced to about US$ 6.5 billion, and gearing (total debt divided by total debt plus stockholders equity) to be about 70 percent. For 2005, the Group's target EBIT margin is 8 percent. Total debt is expected to be reduced to about US$ 4 billion, and gearing to be approximately 50 percent. All targets exclude major acquisitions and divestments, as well as foreign currency movements. ZURICH FINANCIAL: Issues Results and Progress on Restructuring -------------------------------------------------------------- - IAS loss of USD 3.4 billion - Special provisions of USD 3.5 billion - Strong premium growth in Non-life insurance of 27% to USD 29.8 billion - Growth in Life insurance premiums and deposits of 10% to USD 19.6 billion - Strong increase in business operating profit from USD 217 million to USD 1.1 billion - Concentration on execution and delivery through financial discipline, better process management, focus on core insurance businesses and centralized decision making Zurich Financial Services announced an IAS loss of USD 3.4 billion for the year 2002, compared with a loss of USD 387 million in the previous year. Strong premium growth in 2002, as well as an improved claims and cost performance in both Non-life and Life and a reduced investment income, was more than offset by special provisions totaling USD 3.5 billion in line with the action program to refocus the company's activities and restore its profitability announced on September 5, 2002. Zurich recorded gross written premiums, policy fees and deposits (including the Farmers P&C Group Companies) of USD 62.2 billion for the year 2002, an increase of 11% over 2001. Total gross written premiums and policy fees without Farmers grew by 19% to USD 41.4 billion. James J. Schiro, Chief Executive Officer of Zurich Financial Services, said, "While our Non-life business is benefiting from the best pricing environment we have seen in 15 years, weak and fragile equity markets and record low interest rates are negatively affecting our Life business and investment result. However, we are beginning to see the impact of the action program announced on September 5. New processes and structures are in place, and our restructuring is laying the foundation for achieving strong and sustainable earnings." Gross written premiums and policy fees in Zurich's Non-life business (excluding Farmers) rose by 27% to USD 29.8 billion. Life insurance gross written premiums and policy fees increased by 32% to USD 10.2 billion, reflecting the acquisition of the Deutsche Bank Life insurance operations in Continental Europe, which became effective in April 2002. Including insurance deposits, total Life insurance premiums grew by 10% to USD 19.6 billion. Acquisitions contributed USD 2.4 billion to this total. The return on the company's investment portfolio was affected by the continued weakness of financial markets. Although the investment result increased by 2% to USD 6.1 billion, the sum of unrealized and realized gains and losses (including asset impairments of USD 956 million) reduced the net investment income by 24% to USD 5.0 billion, leading to a return of 2.4% on total average investments, after 2.7% the year before. Operational efficiency improved and strategic focus sharpened In line with the action program announced on September 5, Zurich restructured several units, booking special provisions for operational improvements and the repositioning of the Global Assets Business totaling USD 746 million after tax. This restructuring program and previous efforts are showing encouraging results. The Non-life combined ratio before special provisions fell by 5.6 points to 103.6%. After provisioning, the combined ratio was 111.5%. Business operating profit, Zurich's internal measure for assessing performance, increased from USD 217 million to USD 1.1 billion. Cash flow from operations rose by more than USD 7 billion to USD 5.6 billion. The embedded value operating return in the Life businesses rose by 0.3 points to 9.0%, while the new business profit margin improved by 2.0 percentage points to 6.1%. Disposals and repositioned businesses underscore the concentration on core activities and core markets. The sale of Zurich Scudder Investments to Deutsche Bank closed in April 2002, and the company exited further businesses in Central and Northern Europe. These disposals generated gains before tax of USD 498 million. An agreement to sell R�d, Blass & Cie AG to Deutsche Bank was announced in January 2003. In addition, Zurich Capital Markets exited non-core activities, mainly in Australia. Centre will no longer write credit enhancements, and its finite risk P&C insurance and Reinsurance business has been integrated into the Zurich North America Business Division. On September 5, management announced its intention to reduce staff by 4,500 employees by the end of 2003. At December 31, 2002, approximately 2,500 reductions had occurred. Aside from work force reductions additional cost savings were generated from reduced head office expenditures. Gross expenses at Group Head Office declined by 20% to USD 299 million. James J. Schiro added, "Delivering on the action program announced on September 5 is not merely an exercise in cost cutting and harnessing efficiency gains; it's a project that is driving performance and bringing fundamental changes to our operational and financial processes throughout the entire organization." Strengthened balance sheet and capital base management In the first half of 2002, management conducted a thorough review of the adequacy of its Non-life insurance and Reinsurance reserves in consultation with an independent third-party actuarial firm. As a result, Zurich's net reserves were increased by USD 2.0 billion (USD 1.8 billion after tax). At December 31, global reserves for asbestos stood at USD 2.6 billion, bringing the gross survival rate for asbestos exposures to 26 years, which is above the average of US competitors. In addition to these reserve increases, management also approved write-offs totaling USD 954 million after tax, consisting of goodwill and previously capitalized software expenses. The special provisions, totaling USD 2.7 billion after tax, were reported in the company's first- half 2002 results. Zurich has successfully raised USD 2.5 billion through a rights offering. In addition, the capital position was strengthened through issuance and the subsequent exchange of deferred exchangeable securities, contributing USD 344 million to shareholders' equity. After netting currency translation gains, net unrealized losses on financial assets and the IAS loss, shareholders' equity was USD 16.8 billion at December 31, 2002, compared with USD 17.7 billion in the year before. The company has lowered its exposure to volatile equity markets. By year-end the share of equities for which it bears investment risk was reduced to 8.3% of the total investment portfolio, compared with 12.1% in the prior year. For the 2002 financial year, the Board of Directors will propose to shareholders at the Annual General Meeting, to be held on April 30, a payout of CHF 1 per share in form of a reduction of the nominal value. James J. Schiro concluded, "Last year, we began the process of restructuring by returning to fundamentals and repositioning the company as an insurance-based financial services provider. We improved controls and early warning systems, and we will take corrective actions as new challenges emerge. I am encouraged by the resolve of our employees in turning this company around." Performance by Business Segment Non-Life Insurance Non-life insurance operations recorded gross written premiums and policy fees of USD 29.8 billion in 2002. This strong growth, driven by rate increases in key markets, was negatively affected by a decline in capital gains and investment income. Before special provisions of USD 1.5 billion for reserve strengthening and goodwill amortizations and USD 275 million for operational improvements, net income improved from USD 338 million in 2001 to a profit of USD 422 million. The combined ratio before special provisions improved significantly to 103.6% from 109.2%. Business operating profit rose from a loss of USD 128 million in 2001 to a profit of USD 403 million in 2002. Life Insurance Life insurance gross written premiums, policy fees and insurance deposits recorded a 10% growth of USD 1.8 billion to USD 19.6 billion. The acquisition of the Deutsche Bank's former Life operations in Continental Europe contributed USD 2.4 billion to this total. Net investment income, including realized and unrealized capital gains, decreased by USD 98 million, or 3%. A special provision of USD 655 million was taken for goodwill amortizations and operational write offs. Net income before special provisions decreased to USD 358 million from USD 614 million. Business operating profit in the Life insurance segment decreased marginally to USD 739 million. Farmers Management Services Farmers Management Services' pre-provision net income improved from USD 501 million to USD 563 million. This performance is the result of a 6% increase in management fees and other related revenue, both benefiting from growth in premiums of the Farmers P&C Group Companies (which Zurich Financial Services manages, but does not own) as well as from rate increases in the personal lines insurance market in the US. Net investment income, including realized and unrealized capital gains, increased by USD 17 million, primarily due to lower impairment charges on the equity security portfolio. Business operating profit of Farmers Management Services increased from USD 853 million to USD 916 million in 2002. Capital Markets & Banking Capital Markets & Banking recorded a pre-provision loss of USD 125 million in 2002, compared with a net income of USD 89 million in 2001. This segment was impacted by after tax restructuring provisions of USD 169 million in 2002 after the decision to focus on Zurich Capital Markets' core strengths and to exit the online banking sector in the UK. Business operating profit in the Capital Market & Banking segment decreased from a profit of USD 75 million in 2001 to a loss of USD 149 million in 2002. Centre The Centre segment reported a pre-provision loss of USD 140 million, after a pre-provision net income of USD 161 million in 2001.The business operating profit for Centre decreased from a profit of USD 46 million in 2001 to a loss of USD 130 million in 2002. Asset Management In April and May 2002 the company completed the sale of Zurich Scudder Investments - excluding the Threadneedle businesses in the UK - and the asset management operations in Italy and Germany to Deutsche Bank. The sale contributed after tax gains of USD 393 million. Excluding these gains and special provisions, net income improved from a loss of USD 33 million to a net income of USD 31 million in 2002. Business operating profit from the Asset Management segment increased from a loss of USD 39 million in 2001 to a profit of USD 24 million in 2002. Reinsurance - run-off The third-party Reinsurance business known as Zurich Re was separated out in 2001 into a new entity, Converium, wholly owned by Zurich Financial Services. In December 2001, the company disposed of its holding of the share capital of Converium by way of an initial public offering and exited the third party Reinsurance business. It became a run-off operation, and the segment's results now include only the run-off of certain liabilities retained by the company. The pre-provision income improved from a loss of USD 27 million in 2001 to a profit of USD 98 million in 2002. The Business operating profit in the Reinsurance - run-off segment increased from a loss of USD 386 million to a profit of USD 125 million in 2002. Corporate The Corporate segment includes the company's holding companies, expenses at Group Head Office, central financing vehicles and certain businesses in run-off. It reported a loss of USD 1.6 billion, compared with a loss of USD 1.3 billion in 2001. The Business operating profit in the Corporate segment improved from a loss of USD 945 million in 2001 to a loss of USD 808 million in 2002. CONTACT: Zurich Financial Services Media and Public Relations 8022 Zurich, Switzerland Phone: +41 (0)1 625 21 00 Fax: +41 (0)1 625 26 41 Home Page: http://www.zurich.com ZURICH FINANCIAL: A.M. Best Comments on 2002 Year-End Results ------------------------------------------------------------- A.M. Best Co. has commented that the financial strength rating of A (Excellent) of Zurich Financial Services Group (ZFS), Switzerland and core subsidiaries remain unchanged. The outlook remains positive following the company's announcement of the 2002 year-end results. As expected, 2002 year-end results are negatively impacted by the write-off of USD 950 million of intangible assets and a USD 1.8 billion reserve strengthening, as well as asset impairments and the restructuring charges announced in September. Technical results already indicate an underlying improvement, but the main benefits of ZFS' aggressive global profit and capital management improvement programs (divestment of non-core operations, improved claim management, portfolio pruning, substantial non-life price increases, strict cost controls and reduction of equity exposure) are expected to materialize in 2003. ZFS, a leading and diversified provider of insurance and financial services products, continues to enjoy an excellent business position in its selected core markets (Switzerland, Germany, Italy, Spain, United Kingdom and North America). ZFS maintains an excellent risk-based capital base in line with its business strategy. This is likely to be further strengthened after exiting some businesses and a USD 500 million hybrid issue planned for 2003. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. CONTACT: A.M. BEST CO., OLDWICK Jim Peavy, (public relations) Phone: +(1)908/439-2200, ext. 5644 E-mail: james.peavy@ambest.com or Rachelle Striegel Phone: +(1)908/439-2200, ext. 5378 (public relations) E-mail: rachelle.striegel@ambest.com or Jose Sanchez-Crespo Phone: +(44) 20 7626 6264 (analysts) E-mail: jose.sanchez-crespo@ambest.com or Stuart Shipperlee Phone: +(44) 20 7626 6264 (analysts) E-mail: stuart.shipperlee@ambest.com =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: Posts GBP984 Million Loss Before Tax in Results --------------------------------------------------------------- CHIEF EXECUTIVE'S REVIEW Overview Abbey National's reported results for 2002 reflect resilient Personal Financial Services (PFS) businesses overshadowed by large write-offs and charges relating to goodwill, credit exposures in Wholesale Banking and Life Assurance embedded value. These charges reflect the harsh impact on Abbey National of equity and credit market declines in recent years, impairment of certain assets, and management action taken to reduce risk in the business. Abbey National was not well positioned for these market conditions. The resulting loss before tax for the Abbey National Group of o984 million is extremely unsatisfactory to all our stakeholders and highlights the real challenges that the business is facing up to. We are acting fast and decisively to address these challenges. Following an intensive strategic review initiated in November, the ongoing businesses will be focused solely on providing the full range of personal financial services in the UK through direct and intermediary channels. All businesses outside this remit (other than treasury activities supporting PFS) are to be managed for value and exit in the Portfolio Business Unit (PBU). These are detailed below. In taking these and other actions, we will be removing the majority of the risk inherent in current operations outside PFS whilst substantially reducing risk in the ongoing business as well. Abbey National remains well capitalized, offering stability and security to our 16 million customers in the UK, who will increasingly be our focus in the future. This is a radical shift in strategy. It will allow us to channel our energies into our core markets where we have demonstrable strengths and where we have the greatest opportunity to succeed and distinguish ourselves. In all we do, we are governed by the goals of rebuilding and maximizing value for our shareholders, and working with all our stakeholders to deliver enhanced earnings quality. Financial and Business Highlights Included in the loss before tax of GBP984 million (equating to a loss per share of 87.4 pence) are a number of material charges and accounting policy changes, including: - embedded value re-basing and other related adjustments, of GBP632 million pre-tax in 2002, with total prior year restatements of GBP480 million; - goodwill impairments of o1,138 million, (which have not affected regulatory capital ratios); and - provisioning, impairments and losses on disposals of credit impaired assets in the Wholesale Bank totaling GBP902 million. The core ongoing personal financial services businesses remain sound and generated 'trading' profit before tax (defined in Section 1.1) of GBP1,219 million and earnings per share of 50.6 pence in 2002. PFS earnings in 2003 will be adversely affected by a lower expected return on embedded value (prior to any market movement in 2003) following its re-basing to year-end market values, the probability of some additional spread decline in the Retail Bank and additional pension costs as a result of stock market declines. In terms of new business flows, the PFS business ended the year with reasonable momentum, with highlights including: - a 10.6% share of mortgage net lending in the second half, full year 8.9%, and deposit inflows of o1.9 billion in the year; - ISA and unit trust sales almost doubling; - opening of almost half a million bank accounts and issuing over a quarter of a million new credit cards; - sales of general insurance up 20%; and - sustained growth of protection sales, up 38% boosted by the progress of Scottish Provident. Abbey National has also made substantial strides in terms of risk management. Actions taken include: - a review of the Wholesale Bank with assistance from external market specialists; - a 23% reduction in total risk weighted assets in the Wholesale Bank, with assets allocated to the portfolio business unit further reduced by GBP7.7billion in the first seven weeks of 2003. Significant progress in reducing concentration risk is also being made; - major steps taken to reduce the risks in our life assurance business from exposure to downward movements in equity markets, including hedging programs for product guarantee risks and substantial reductions in the effective equity backing ratios of the 'with-profits' funds (25% as at market levels on 19 February 2003); - ceasing the manufacture of with-profits bonds and subsequently reducing bonus rates in the light of the third successive year of market falls; - improved lending quality in the Retail Bank; and - a range of activities to reduce other risks including addressing interest rate risk and pension fund risks. This includes the closure of the defined benefits pension scheme to new starters in 2002 and a reduction in the scheme's equity exposures in early 2003. Capital and Dividends The Board is proposing a final dividend of 7.35 pence, to give a full year dividend for 2002 of 25 pence per share (2001: 50 pence per share). The 25 pence level represents an appropriate starting point based on the trading potential of the ongoing PFS businesses, whilst having regard for the non-cash elements of Life Assurance reported earnings. It is Abbey National's intention to rebalance the dividend in 2003 in order to maintain its historical target split of payments between the interim and final dividend of approximately one-third/two thirds for future years. For the future, we are targeting progressive dividend payouts. However, until the re-structuring is further progressed and underlying business performance improves, expected future dividend growth rates and payout ratios cannot be finalized. We believe that the steps we are taking are consistent with our desire to ensure a strong capital position to protect against market shocks, and to maintain stability and offer security to our customers. At the same time our actions are materially reducing the risks in the business against which capital is held. At all times we intend to be disciplined in managing for shareholder value. A net capital release from the PBU is targeted. To the extent that surplus capital arises from our actions, we favour shareholder distribution unless there is a compelling strategic and economic case for reinvestment. Strategy Abbey National intends to maximize customer and shareholder value. We are targeting excellence via an intense focus as the largest 'pure-play' provider of personal financial services in the UK. While not yet in optimal shape, we nevertheless start with a franchise of around 16 million customers, a top 5 position in many relevant markets, a distinctive, trusted and powerful brand, and broad distribution network. Our goal is to deliver a compelling proposition to UK consumers, who do not feel that they have been well served by the UK banking industry. Through the highest level of service and advice to all, we will deliver more value to customers - to earn their trust and commitment. Work is underway to develop and implement this model. To support this, we have moved away from a vertical, silo-based organizational approach, to a flatter, functional structure. This new structure is built around the customer, and will deliver enhanced performance through a streamlining of operations and enhanced focus on the economics of distribution and production. A rigorous consolidation, rationalization and sourcing review is underway. We will operate as 'one company' based on function, with a single leadership team, whilst reducing risk and realizing capital from non-core activities. Cost Reduction We are targeting annualized cost savings exceeding o200 million in our PFS businesses, deliverable by the end of 2005. In addition, extensive cost savings will be realized in the Portfolio Business Unit as disposals and rundowns are executed. In total, implementation costs are expected to lie in a similar ratio to those of other cost programs in the financial services sector in recent years. The majority of the implementation spend is expected to be incurred in 2003 and 2004. It is the intention that some of the cost savings will be reinvested where critical to the transformation of the business. Portfolio Business Unit As part of the strategic review, all businesses were challenged in terms of their underlying potential, within the context of the company's need to focus on its competitive strengths. As a result, all international operations (excluding certain international funding and deposit taking activities) have been deemed non-core, as has First National due to the lack of synergy and brand compatibility. It is important to stress that whilst we will exit the operations, some of these businesses remain profitable and open for 'business as usual' - they simply do not fit with the new focus. The asset-based portfolios (loans, leasing and bonds), representing a majority of the Wholesale Bank's risk, have also been assigned to the PBU. This reflects application of the same criteria and also the desire to align risk appetite with business advantage and stakeholder needs going forward. In 2003 and thereafter, a material fall in pre-provisions PBU income would be expected dependent on the pace of wind down of the asset based portfolios. In addition, dependent on market conditions and the speed and manner of the asset run-off or disposal process selected, further substantial credit related losses could arise as risk is reduced and capital released. All of the PBU portfolios and businesses will be managed to maximize value to our shareholders, targeting the greatest net capital release. Equally, it is important that this release of capital and management resource is timely. As a result, consideration is being given to a range of strategies, which would enable business and asset disposal, or run-off, of the majority of assets in the PBU within the next three years. The activities we are exiting are primarily those where we have limited competitive advantage and therefore, if kept, would tend to produce weak returns on capital and be especially vulnerable to disproportionate losses in bear markets. Progress to date Abbey National has made considerable progress since the interim stage and accelerated the transformation process since the strategic review commenced in November. The Wholesale Banking asset base and concentrations have been significantly reduced, with excellent progress also made in the first few weeks of 2003. We have stepped away from the manufacture of with-profits bonds, replacing them with a version of Prudential's Prudence Bond in our branch network and a soon to be launched smoothed investment product for the intermediary channels. We have taken major steps in mitigating shareholder and customer exposure to further downward movements in equity markets in relation to the stock of business previously written. Important risk mitigation has also been accomplished in pensions and interest-rate exposures. In 2003, we have already contracted to sell the Consumer and Retail Lending businesses of First National Bank (excluding Motor Finance and Litigation Funding) for a premium to net assets before goodwill of GBP218 million, which will dispose an estimated GBP3.9 billion of risk weighted assets on completion. Since December, a transformation program led by the Executive team and 50 top managers has been executed and the new top-level structure, strategy and implementation plan put in place. This has allowed planned cost savings to be validated and is a key enabler to future business improvement. As shown by this release, we have also significantly increased disclosure and transparency in our reporting - a discipline we intend to maintain. Key Performance Indicators (KPIs) and immediate goals A key principle in the new organisation will be to increase accountability and drive superior performance through greater internal and external transparency. Over time, we will develop and disclose performance measures that are aligned to the long- term improvement in company value, and will be used to measure performance internally. The high level KPIs are: - revenue per customer; - operating costs per customer; - new customer metrics; - customers retention metrics; and - passive customer metrics. These KPIs are aimed at sales efficiency, profitability and length of relationships. Market share will be a measure of our success, not a driver of value per se. Our priorities for the next six months include: - implementation of the new company structure, with all roles confirmed and initial KPIs defined and communicated; - delivering tangible improvements in terms of sales and service, supported by the launch of new CRM software 'One on One' and a new advice model in testing phase; - 'on track' performance versus cost targets; and - further substantial progress within the PBU. Challenges ahead 'On behalf of the whole Board, I would like to express our regret at the results and dividend cut that we have announced today. However we have absolute conviction that we are pursuing the right strategy for Abbey National; for our customers, our employees, and our shareholders. It will be a long, hard process that we envisage spanning the next three years. We know that our shareholders will want to see tangible progress along the way, and we will be reporting regularly, the first opportunity being at the time of the interim pre-close statement in June. When we have completed our three-year strategy we intend Abbey National to be esteemed by all its stakeholders for its positive value attributes. The strategy will focus all our resources on serving the personal financial services needs of the customer - by delivering greater value to our customers, we will earn more value for shareholders. Our focus, as a scale institution, will make us unique and will enhance business performance and execution. The events of 2002 have also acted to focus minds, and this is already driving an increased sense of determination and delivery within the business. Our people are integral to our success and they are responding positively. We have aligned all our talent, investment and energies on a clear, single and unifying goal under a suitable organisational structure. We are now wholly focused on delivering. ' Luqman Arnold To view Abbey National's financial statement: http://bankrupt.com/misc/AbbeyNational.pdf HUNTERS OF BRORA: Petitions to Liquidate After Venture Failed ------------------------------------------------------------- Hunters of Brora woolen mill motioned to file for liquidation after an attempt to divert its woolen mill image into a new look with new materials failed. Managing director Valerie Walker, owner of the company since 2000, said: "We have tried every avenue to make this company work, but the uncertainty in the worldwide market has meant that with no orders in the foreseeable future the only option is to cease to trade." The decision came despite investment of almost GBP8 million of public money into the company, which succumbed into receivership in April 2000. The world-famous company, which traded for more than 100 years, used to manufacture tweed using wool from the Highlands and Islands. In 1999, it diversified its product into wools blended with other natural fibers such as silk, mohair and linen. Highlands and Islands Enterprise asserts Hunter's building will not be lost at the closure. The building being referred was built with funding of GBP5.3 million from HIE and GBP2.02 million from the European Regional Development Fund. HIE maintains the asset "remains in public ownership." A spokesman said "HIE and Caithness and Sutherland Enterprise awarded the business a total of GBP230,000, which was made up of loan and equity. This helped sustain 26 jobs." The company's indebtedness is still to be established, but the dismissal of the 26 employees is already expected. PIZZAEXPRESS: Rival Challenges Johnson's Takeover Offer ------------------------------------------------------- A consortium led by Capricorn Ventures International complained it was not given enough time to contend with a recommended GBP263 million takeover bid from Luke Johnson. Teamed up with former chief executive Ian Eldridge, Mr. Johnson is understood to have offered about 370p a share with backing from private equity firm ABN Amro Capital. Mr. Johnson, who is being advised by Hawkpoint Partners on the deal, bids through Venice Bidder. The bidding vehicle reportedly has already a stake of more than 8%. But owner of the Nando's chicken chain said it is considering making a higher offer. "We were surprised and disappointed the independent directors of PizzaExpress cut short the bidding process before we had a chance to submit our offer. We are serious people and were looking at this very seriously for some time," a source close to the consortium said. The party succeeded in winning a Friday deadline to file a firm bid, according to Times Online. Nigel Colne, the chairman of PizzaExpress and the senior independent director, denied that the auction had been cut short in response to suggestions that Fidelity Investments, a 10% shareholder, reportedly wanted to abort the whole process pending improvement in trading condition. "We needed to get a bid on to the table to give them a choice. It is for shareholders to decide," he explained. CONTACT: PIZZAEXPRESS PLC 1 Union Business Park Florence Way Uxbridge UB8 2LS Contacts: Nigel Colne, Chairman David Page, Chief Executive Paul Campbell, Group Finance Director Phone: 01895 618618 Sue Pemberton, Citigate Dewe Rogerson Phone: 020 7638 9571 WESTON MEDICAL: Faces Uncertain Future, Likely to Liquidate ----------------------------------------------------------- The future of Weston Medical, a company developing needle-free injection devices, was placed in uncertainty after talks with potential financial providers fell off. The company appointed Altium Capital in September to raise an emergency GBP10 million funding, after disclosing that a design fault would delay development of its Intraject device by at least 12 months. But talks with shareholders 31, Phildrew Ventures and Nomura fell off for reasons that the company's chief executive, Christopher Samler, claims he was "not at liberty to say." The company had also been in discussion about a leading management buyout, but the idea is still without certainty. Weston has only GBP3 million to last until the end of March, at which time it should have found a backer or be forced to axe about 80 jobs at the company's Cambridge headquarters. The potential job losses will be in addition to the 90 job cuts it took in September in Cambridge, and at another site, at Stradbroke, Suffolk, in an attempt to reduce its cash burn rate. "We are considering all of our options," he said, adding that these included putting the company into liquidation, according to The Telegraph. Shares in the company were suspended at 2 1/2 p on Tuesday after the company's admission that the talks had collapsed. CONTACT: WESTON MEDICAL GROUP PLC Wingate House Maris Lane Trumpington Cambridge, CB2 2FF UK Phone: +44 (0) 1223 550 000 Fax: +44 (0) 1223 550 100 ************ 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. 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