/raid1/www/Hosts/bankrupt/TCREUR_Public/030318.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
Tuesday, March 18, 2003, Vol. 4, No. 54
Headlines
* C Z E C H R E P U B L I C *
UNION BANKA: Czech National Bank to Decide Future Soon
* F R A N C E *
CANAL PLUS: Employees Stage Strike to Protest Job Cuts
* G E R M A N Y *
BAYER AG: Hopes to Find Partner for Pharma Division Dashed
BAYER AG: Analysts Warn of Significant Pay Outs for Lawsuits
BAYER AG: Office of Charles J. Piven Announces Class Action
COMMERZBANK AG: Job Cuts, Bonus Reductions After EUR327M Loss
DEUTSCHE TELECOM: Dr. Klaus Zumwinkel Is New Board Chairman
* I R E L A N D *
ELAN CORP: Announces Receipt of FTC Inquiry Relating to Skelaxin
* I T A L Y *
CAPITALIA SPA: Issues Joint Statement on Assicurazioni Generali
FIAT AUTO: GM Likely to Avoid Having to Subscribe to Put Option
TELECOM ITALIA: Shareholders Complain Against Merger Plan
TELECOM ITALIA: Issues Statement Regarding Reports on Wind
WIND TELECOMUNICAZIONI: Under Probe for Government-Backed Loan
* L U X E M B O U R G *
MILLICOM INTERNATIONAL: Extends Period for Exchange Offer
* M O N A C O *
MC SHIPPING: Fitch Withdraws Ratings at Company's Request
* N E T H E R L A N D S *
GETRONICS N.V.: Executives Reviewing Options Available
KONINKLIJKE AHOLD: Uruguayan Court Summons Former Chief
KONINKLIJKE AHOLD: No Timetable for Internal Investigation
KONINKLIJKE AHOLD: Pomerantz Firm Sets Deadline for Investors
UNITED PAN-EUROPE: Announces Ratification of Akkoord in Court
* P O L A N D *
BRE BANK: Informs Public About Schedule of Warrants Issue
OCEAN COMPANY: Plans to Appeal Court's Ruling on Bankruptcy
* R U S S I A *
ALFA BANK: Outlook Revised to Positive, Ratings Affirmed
ALROSA CORP.: Rating Raised to 'B' Due to New Export Quota
* S W I T Z E R L A N D *
CLARIANT AG: Presents Resolutions of Board of Directors
SWISS INTERNATIONAL: Posts Net Loss of CHF658 MM for 2002
ZURICH FINANCIAL: Exits Asset Management Business in India
* U N I T E D K I N G D O M *
AMEY PLC: Shareholders Approve Disposal of PFI Portfolio
BRITISH AIRWAYS: War to Force Job Cuts and Aircraft Grounding
CORUS GROUP: Long-Term Ratings Cut to 'BB-', Watch Negative
CORUS GROUP: Chief Executive Steps Down From Office
CORUS GROUP: Records Operating Loss of GBP141 Million for 2002
L. GARDNER: Insinger de Beaufort Is Group's New Adviser
L. GARDNER: Announces Result of Extraordinary General Meeting
MARCONI PLC: CEO Defines Business and Vision for the Future
MARCONI PLC: Two New Non-Executive Directors Join Board
MYTRAVEL GROUP: Struggles to Find Buyer for Cresta
PIZZAEXPRESS: Investors Call for Resignation of Chairman
ROYAL & SUNALLIANCE: Fitch Ratings Withdraws 3 USA Ratings
===========================
C Z E C H R E P U B L I C
============================
UNION BANKA: Czech National Bank to Decide Future Soon
------------------------------------------------------
Czech National Bank is to decide the future of troubled Ostrava-
based Union Banka before the deadline for administrative
proceedings expires.
Spokeswoman Alice Frisaufova said in a meeting of the CNB Bank
Board, which was also attended by Finance Minister Bohuslav
Sobotka, that the national bank might come up with the decision
on March 24.
Reports say the central bank has within the administrative
proceedings already received documents needed to decide whether
UB's license will be revoked.
UB closed down its branches earlier due to insufficient
liquidity.
The bank earlier claimed that CNB owes it CZK1.7 billion in
relation to UB's acquisition of the bank Skala, which was
completed in mid-1990.
Reports say 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.
CNB rejects the claim, on the assertion that the parties had
closed the transaction way back 1999.
===========
F R A N C E
===========
CANAL PLUS: Employees Stage Strike to Protest Job Cuts
------------------------------------------------------
Employees at Vivendi Universal's loss-making television unit
expressed their protest against the planned axing of the
company's personnel by disrupting broadcast of some shows early
last week.
The industrial action has so far been limited to disruptions in
the recording of a number of shows, which the station airs free
of charge, a person familiar with the matter told Dow Jones.
There are 305 jobs that are set to go under the restructuring
plan of Canal Plus Group, Vivendi Universal's television arm
saddled with a EUR5 billion (US$5.5 billion) debt.
Of the total, 251 will be cut from the company's headquarters,
Canal+ SA, CanalSatellite and Canal+ Distribution. The balance of
54 posts will be cut from StudioCanal.
The unit that suffers from annual losses of EUR325 million
further plans to outsource 140 jobs.
The layoffs are part of a program aimed at cutting costs,
divesting non-core assets and bringing the company back to
profitability in 2003.
CONTACT: VIVENDI UNIVERSAL
Headquarters
42 Avenue de Friedland
75380 Paris Cedex 08
France
Phone: +33 1 71 71 10 00
Fax: +33 1 71 71 11 79
Contact:
Investor Relations
E-mail: investor-relations@groupvu.com
Daniel Scolan, Executive VP
Investor Relations
Phone: +33.1.71.71.12.33
E-mail: daniel.scolan@groupvu.com
Laurence DANIEL
IR Director, Europe
Phone: +33.1.71.71.12.33
E-mail: laurence.daniel@groupvu.com
Edouard LASSALLE
Associate Director, Europe
E-mail: edouard.lassalle@groupvu.com
=============
G E R M A N Y
=============
BAYER AG: Hopes to Find Partner for Pharma Division Dashed
----------------------------------------------------------
Rolf Classon, head of Bayer's pharma division, dashed hopes of
finding a partner for the division in the short term when it said
the unit could survive alone.
"Of course, I see a possibility for the pharma business to stand
alone," Mr. Classon told Reuters adding, "But this wouldn't be
the best solution."
While including a partnership as a possibility for the whole
pharma business he stressed that there were other possibilities,
and that it is mutually interested in other companies just as
other companies are interested in it.
Analysts perceive this as a "back-tracking" from its earlier
assurance that the company is close to finding a partner--an
achievement crucial to the future of the company whose drugs unit
is considered sub-scale in an industry moving towards
consolidation.
Chief Executive Werner Wenning, on the other hand, said the
company would not sell its drug unit outright as the search for a
partner continues.
Wenning in November opened the possibility of losing majority
stake in the unit in order to attract potential investors.
But with legal lawsuits relating to its drug Baycol rocking the
company's shares, bankers and industry analysts are skeptical
that the company will be able to strike a deal.
While lawsuits are ongoing, it is hard to value the drugs unit,
despite the possibility of pointing out the company's
liabilities.
After several firms abandoned plans for Bayer's drug division,
the only remaining possibility for the company, according to the
report, is to find a partner among Japanese companies like Sankyo
and Dai-Ichi, which operate in segments similar to Bayer's.
Bayer's healthcare division operates in pharmaceuticals,
diagnostics, biological products, consumer care and animal
health. It has annual sales of about EUR10 billion euros
(US$10.87 billion) and employs over 34,000 people worldwide.
CONTACT: BAYER AG
Werk Leverkusen
51368 Leverkusen, Germany
Phone: +49-214-30-58992
Fax: +49-214-307-1985
Homepage: http://www.bayer-ag.de
BAYER AG: Analysts Warn of Significant Pay Outs for Lawsuits
------------------------------------------------------------
Analysts estimate that German drug and chemicals group Bayer AG
may have to pay out between US$5 billion and US$10 billion in
damages as lawsuits relating to its controversial drug Baycol
pile up.
The cholesterol-lowering drug, which was linked to more than 100
deaths globally, was the subject of 8,400 suits, and Bayer has
spent EUR140 million on settling 500 cases out of the court.
Thirteen of the 500 are cases of deaths, according to Bayer Chief
Executive Werner Wenning.
Wenning, who said that the amount had been covered by insurance,
also admitted in a press conference that although the amount did
not represent the limit of product liability insurance for
Baycol, its insurance cover might not be sufficient to deal with
all claims.
A deliberation on the first of more than 8,000 lawsuits claiming
that Baycol caused a severe muscle disorder that could even cause
death was scheduled to start Friday in the U.S.
One attorney acting for plaintiff Hollis Haltom had asked the
jury for total damages of nearly US$560 million.
The company's shares have halved in value since the beginning of
the year on fears that it may have to pay huge damages related to
Baycol.
CONTACT: BAYER AG
Werk Leverkusen
51368 Leverkusen, Germany
Phone: +49-214-30-58992
Fax: +49-214-307-1985
Homepage: http://www.bayer-ag.de
BAYER AG: Office of Charles J. Piven Announces Class Action
-----------------------------------------------------------
Law Offices Of Charles J. Piven, P.A. today announced that a
securities class action has been commenced on behalf of
purchasers of Bayer AG American Depositary Shares between May 26,
1999 and February 21, 2003, inclusive. Prior to January 23, 2002,
Bayer AG ADRs traded on the NASDAQ under the symbol BAYZY.
The case is pending in the United States District Court for the
Southern District of New York against defendant Bayer AG and
certain present and former members of its Board of Management.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
statements had the effect of artificially inflating the market
price of the Company's securities.
No class has yet been certified in the above action. Until a
class is certified, you are not represented by counsel unless you
retain one. If you are a member of the Class, you may move the
court no later than May 12, 2003 to serve as a lead plaintiff for
the Class. In order to serve as a lead plaintiff, you must meet
certain legal requirements. To be a member of the class you need
not take any action at this time, and you may retain counsel of
your choice.
If you were a purchaser of shares of the Company listed above
during the period indicated and want to discuss your legal
rights, you may e-mail or call Law Offices Of Charles J. Piven,
P.A. who will, without obligation or cost to you, attempt to
answer your questions. Law Offices Of Charles J. Piven has been
involved in securities litigation for over ten years. You may
contact Law Offices Of Charles J. Piven, P.A. at The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202, by email at hoffman@pivenlaw.com or by calling
410/986-0036.
CONTACT: LAW OFFICES OF CHARLES J. PIVEN, P.A., BALTIMORE
Charles J. Piven
Phone: 410-986-0036
E-mail: hoffman@pivenlaw.com
COMMERZBANK AG: Job Cuts, Bonus Reductions After EUR327M Loss
-------------------------------------------------------------
Germany's fourth-biggest bank is eliminating about 2,800 more
jobs and cutting bonuses for investment bankers by more than half
after its first full-year loss.
Commerbank AG recently recorded a pre-tax loss of EUR372 million
in its results for financial year 2002.
People familiar with the matter said Commerzbank's staff
reductions would bring the total announced to 7,100, or almost
19% of the workforce, since the bank began shedding jobs in
October 2001.
Bloomberg reported that Chief Executive Officer Klaus-Peter
Mueller is trying to cut costs after the Frankfurt-based bank
lost EUR298 million (US$319 million) last year. Bonuses are also
being reduced after fees from advising on mergers and arranging
share sales dried up.
This gives out a clear view that "underlying finances are pretty
unsound," said Clark Ray, senior partner at Dagama consulting, a
London-based recruitment firm working with investment banks.
"People cutting back on bonuses is to be expected but if you are
smart, you pay the guys making the gravy," he added.
Commerzbank's spokesman Peter Piestch declined to comment and
said no decision has been made on personnel reductions yet.
However, the bank has said it would give details on the cost-
reduction plan, which it calls "cost-cutting offensive plus," in
March. It set aside EUR177 million in the fourth quarter to pay
for job cuts at its securities and consumer-banking division.
Further job cuts "might be unavoidable," Mueller said at a
February 5 press briefing. "We're not expecting a good year."
Union representatives have said they expect as many as 3,000 more
cuts.
The cost-reduction plan counters rising loan and investment
losses as economic growth stalls and stock markets fall.
Meanwhile, Commerzbank reportedly has told the 1,600 investment
bankers about their bonus reductions this week. The biggest
bonuses were paid in debt capital markets, fixed income and
asset-backed securities, which contributed most to investment-
banking earnings last year. Bonuses for equity derivatives
workers were cut, the people said.
The bank has also recently announced it will cut half its 58
staff in Japan by June 30 and close its foreign currency
business, following the shrink in business in Tokyo.
Commerzbank follows ABN Amro Holding NV, Societe Generale SA and
other foreign banks in scaling back in Japan, where three
recessions in 10 years have crimped demand for credit and other
services. Fewer German companies arrive in Japan every year,
reducing Commerzbank's pool of potential new clients.
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 TELECOM: Dr. Klaus Zumwinkel Is New Board Chairman
-----------------------------------------------------------
In the Deutsche Telekom AG Supervisory Board Meeting, Dr. Hans-
Dietrich Winkhaus resigned from his position as Chairman of the
Supervisory Board, as announced. The Deutsche Telekom AG
Supervisory Board has elected Dr. Klaus Zumwinkel as the new
Chairman.
"The Company would like to thank Dr. Winkhaus for his enormous
personal commitment. As Chairman of the Supervisory Board, Dr.
Winkhaus played a considerable role in shaping the development of
the company", said Kai-Uwe Ricke, Chairman of the Board of
Management of Deutsche Telekom.
=============
I R E L A N D
=============
ELAN CORP: Announces Receipt of FTC Inquiry Relating to Skelaxin
----------------------------------------------------------------
Elan Corporation, plc announced Friday that it received
notification, late Thursday, from the U.S. Federal Trade
Commission that the FTC's Bureau of Competition has commenced an
investigation to determine whether Elan or any other person has
engaged in unfair methods of competition with respect to Skelaxin
T(metaxalone).
As previously announced, Elan has agreed to sell its primary care
franchise (principally its U.S. and Puerto Rican rights to
SonataT (zaleplon) and SkelaxinT to King Pharmaceuticals, Inc.
King also received the FTC notification. The closing of the
primary care transaction is subject to approval by Elan's
shareholders at an extraordinary general meeting of shareholders
to be held on for March 18, 2003, and to other customary closing
conditions. Elan is currently reviewing the FTC notification and
is evaluating its potential impact on the closing of the
transaction.
Elan is focused on the discovery, development, manufacturing,
selling and marketing of novel therapeutic products in neurology,
pain management and autoimmune diseases. Elan shares trade on the
New York, London and Dublin Stock Exchanges.
CONTACT: ELAN CORPORATION, PLC
Investors: (U.S.)
Jack Howarth
Phone: 212/407-5740
800/252-3526
or
Investors: (Europe)
Emer Reynolds
Phone: 353-1-709-4000
00800 28352600
=========
I T A L Y
=========
CAPITALIA SPA: Issues Joint Statement on Assicurazioni Generali
---------------------------------------------------------------
UniCredito Italiano S.p.A., Banca Monte dei Paschi di Siena
S.p.A. and CAPITALIA S.p.A. announce that their respective
Deliberating Bodies have authorized the constitution of a pact
that commits the parties to consult jointly on a periodic basis
and, in any case, before every Shareholders' Meeting of
Assicurazioni Generali S.p.A., to discuss any matter of common
interest relating to the aforementioned company.
The pact does not, however, constitute a binding obligation with
regard to the exercising of rights deriving from the possession
of Generali shares: each party remains, therefore, free to
exercise such rights according to their own independent
considerations.
The signatories contributed to the pact a percentage totaling
8.46% of the share capital of Generali, distributed as follows:
(i) UniCredit 44,522,058 shares, equal to 3.49%; (ii) Monte dei
Paschi di Siena 37,678,000 shares, equal to 2.95%; (iii)
CAPITALIA 25,740,039 shares, equal to 2.017%.
The pact has a duration of 6 months and is automatically renewed,
with exception of withdrawal, which must be communicated three
months prior to the original or extended date of expiration. The
effectiveness of the agreement will, however, cease for that
party which, in the course of its duration, sells or in any event
divests its own participation in Assicurazioni Generali S.p.A. or
reduces such holding in a material manner.
The pact will be communicated to the CONSOB and disclosed to the
public, as well as be deposited, according to procedures foreseen
by the normative directives and regulations currently in force.
On March 12, Capitalia S.p.A. announced that it reached a
percentage equal to 2.017% of the share capital of Assicurazioni
Generali S.p.A. As a result of surpassing the limit of 2%, the
Company is undertaking the necessary communication to the CONSOB.
*****
Early in November, Moody's Investors Service downgraded to C from
C+ Capitalia Spa's financial strength rating.
While noting that the then-named Banca di Roma group benefited
from its integration with Bipop-Carire group, the rating agency
said it expects the bank's credit profile to continue to suffer
from legacy issues.
FIAT AUTO: GM Likely to Avoid Having to Subscribe to Put Option
---------------------------------------------------------------
Analysts and investors are becoming more convinced that General
Motors Corp. is likely to find a way to avoid having to buy the
remaining 80% of Fiat Auto under a put option, Dow Jones reports.
The deal would have General Motors capitalize the unit that lost
US$1.3 billion in 2002.
But General Motors in its annual filing said: if Fiat Auto were
to need additional funding, GM would have to decide whether or
not to provide such funding and under what conditions to provide
any funding."
Ron Tadross, a Banc of America Securities analyst who does not
own shares in either company, said he does not believe the
transaction will happen because "the Italian government won't let
it get done."
According to the report, one analyst said the Italian government
has expressed interest in keeping Fiat Italian, possibly to avert
job cuts once the turnaround of the business is placed in the new
owner's hands.
Fiat Chairman Umberto Agnelli also echoed the same hopes of not
having to resort to exercising the put option two weeks ago.
Analysts predict that GM is likely to pay Fiat a certain amount
in order to get free from the contract whose provision on
capitalizing Fiat Auto is expected to give the company a
headache.
TELECOM ITALIA: Shareholders Complain Against Merger Plan
---------------------------------------------------------
Telecom Italia shareholders are angry at the company's proposed
plan to merge with Olivetti, the holding company that owns 55% of
the phone group.
Investors threatened to explore all means to block the proposed
transaction that would also merge Olivetti's EUR15.2 billion
(US$16.5 billion) debt with Telecom Italia's EUR18.2 billion.
The management is reducing the number of companies that control
Telecom Italia in order to diminish the proportion of cash flow
that goes to corporate taxes.
Under the plan seven Olivetti shares would be swapped for one
Telecom Italia share, between EUR1.02 and EUR1.12 a share will
also be offered to Olivetti shareholders from a EUR9 billion
loan. Cash not used for that offer will be used for a partial
offer for Telecom Italia stock at between EUR7 and ?8.40 a share.
Hedge fund Liverpool Limited Partnership is leading the investors
in their protest. The group contends that Telecom Italia
shareholders were being asked to finance Olivetti's debt and the
EUR9-billion loan.
They also argued about the low net asset value of Olivetti
compared to that of Telecom Italia. Telecom Italia's net asset
value, according to them, is almost 15 times that of Olivetti,
which is around 30 cents a share. Olivetti's only asset is its
55% stake in Telecom Italia.
In defense, Marco Tronchetti Provera, Telecom Italia chairman
said: "In only three days, we had banks offering EUR25 billion in
financing for the project. Telecom Italia by itself couldn't find
EUR5 billion. Obviously many investors think this creates value."
It is known that the hedge fund also led minority shareholders
into blocking a proposal aimed at cutting Olivetti's debt two
years ago.
But analysts now perceived the current case to have fewer strong
arguments and potential legal maneuvers, according to the
Financial Times.
Analysts believe the merger plan will improve Telecom Italia's
debt ratings in the long run.
TELECOM ITALIA: Issues Statement Regarding Reports on Wind
----------------------------------------------------------
With reference to the news appearing in some of Friday's
newspapers, TIM states that in February 2001 it initiated a
procedure to throw light on allegations of government aid in
favor of Wind. According to Friday's news this initiative would
have accompanied by similar initiatives taken by other operators.
The procedure in question has followed the usual investigative
process adopted by the European Union in such circumstances.
WIND TELECOMUNICAZIONI: Under Probe for Government-Backed Loan
--------------------------------------------------------------
The European Commission is investigating telecommunications
group, Wind, in relation to the EUR1.3-billion (US$1.4 billion)
loan provided to it by the Italian government.
The regulators are concerned that the grant might have enabled
Italy's second largest communications group to offer services at
cut-rate prices, thus endangering competition. European state
aid rules forbid state-owned companies from giving loans at rates
below the market interest rate.
The Commission has given the Italian government until the end of
the month to provide details of capital increases granted by
Enel, the state-owned energy group that is Wind's main
shareholder alongside France Telecom, the Financial Times cited
people close to the matter as saying. The capitalization is worth
a total of EUR520 million.
According to the report, the regulators believe that if the
expected rate of return was below the one Enel could have
obtained on other investments, the capital injections could be
classified as illegal state aid.
Wind stands to repay the aid once the Commission, headed by Mario
Monti, has proven that the loan gave it unfair advantage over
competitors.
The Commission and the Italian government declined to comment,
according to the report.
Also part of the inquiry are the EUR826 million, 10-year loan
granted by Enel and France Telecom to Wind in 2000, and the
contract for exclusive use of Enel's 10,000-km long fiber optic
network by Wind for a period of 15 years. The charge might have
been too little, according to the Commission.
Wind, the nation's market leader in Internet subscriptions, had
net losses of EUR327 million in the first half of 2002.
The company has a 15% share of the Italian mobile market, and 25%
of the fixed-line market. It has 11 million customers and a 37%
market share.
===================
L U X E M B O U R G
===================
MILLICOM INTERNATIONAL: Extends Period for Exchange Offer
---------------------------------------------------------
Millicom International Cellular S.A., the global
telecommunications investor, on Thursday announces that it is
extending the private exchange offer and consent solicitation
to holders of 13-1/2% Senior Subordinated Discount Notes due
2006, or the "Old Notes", who are not U.S. persons, or who are
U.S. persons that are either "qualified institutional buyers" or
"institutional accredited investors" (as each of those terms are
defined under the Securities Act of 1933, as amended) and who can
make the representations to exchange, upon the terms and subject
to the conditions set forth in the private offering documents,
until 5:00 p.m. New York City time on March 21, 2003, unless
further extended by Millicom.
The rights of withdrawal for those bondholders who have already
tendered their acceptance to the exchange offer and consent
solicitation shall continue until the new expiration date in
accordance with the terms of the private offering documents.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell Millicom's securities and is not
being made to, nor will tenders be accepted from, or on behalf
of, holders of Old Notes in any jurisdiction in which the making
of the exchange offers and consent solicitations or the
acceptance thereof would not be in compliance with the laws of
such jurisdiction.
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16 cellular
operations and licenses in 15 countries. Millicom's cellular
operations have a combined population under license (excluding
Tele2) of approximately 360 million people.
In addition, Millicom provides high-speed wireless data services
in seven countries. Millicom also has a 6.8% interest in Tele2
AB, the leading alternative pan-European telecommunications
company offering fixed and mobile telephony, data network and
Internet services to over 16 million customers in 21 countries.
Millicom's shares are traded on the Nasdaq Stock Market under the
symbol MICC.
Lazard is acting for Millicom International Cellular S.A. in
connection with the exchange offer and consent solicitation and
no-one else and will not be responsible to anyone other than
Millicom International Cellular S.A. for providing the
protections offered to clients of Lazard nor for providing advice
in relation to the exchange offer or consent solicitation.
CONTACTS: MILLICOM INTERNATIONAL CELLULAR
Marc Beuls, President and Chief Executive Officer
Phone: +352 27 759 101
Home Page: http://www.millicom.com
LAZARD, NEW YORK
Jim Millstein
Phone: +1 212 632 6000
LAZARD, LONDON
Peter Warner
Daniel Bordessa
Cyrus Kapadia
Phone: +44 20 7588 2721
SHARED VALUE LTD, LONDON
Andrew Best
Phone: +44 20 7321 5022
===========
M O N A C O
===========
MC SHIPPING: Fitch Withdraws Ratings at Company's Request
---------------------------------------------------------
Standard & Poor's Ratings Services said Friday it withdrew its
'B-' corporate credit and 'CCC' senior unsecured debt ratings on
Monaco-based MC Shipping Inc. at the company's request. The
outlook was stable.
MC Shipping operates a fleet of 17 ships, comprising eight
container vessels, two multipurpose sea-river vessels, one very
large gas carrier, and six small gas (LPG) carriers.
=====================
N E T H E R L A N D S
=====================
GETRONICS N.V.: Executives Reviewing Options Available
------------------------------------------------------
Newly appointed executives at Getronics N.V. are considering
inviting other companies to invest in the debt-laden company and
selling some parts of the assets.
Chief Executive Axel Rueckert and Vice-chairman Klaas Wagenarr
were recently appointed to ensure "the short- and medium-term
future of Getronics."
The company in a statement said it is taking time to review all
its financial options, as there is still no immediate pressure
for it to take drastic actions. Although it admitted the need
for more funding in the future, whether or not the debt-for-
equity swap is completed.
"Given the company's cash position, new management does not
believe that there is any immediate risk threatening Getronics'
short-term survival," the company said in a supplement to its
debt-for-equity swap prospectus.
As for plans to divest assets, Mr. Rueckert ruled out selling its
Italian operations, or any other large parts of the company,
according to Dow Jones. The sale of the whole company is also
"unlikely."
Getronics N.V. is planning to swap convertible bonds for shares
to reduce the huge debts it is shouldering as a result of the
acquisition of U.S.-based Wang Global in 1999.
KONINKLIJKE AHOLD: Uruguayan Court Summons Former Chief
-------------------------------------------------------
Uruguayan judge Pablo Eguren confirmed he issued a court summons
for Ahold's former CEO Cees van der Hoeven to testify in relation
to his involvement in a local corruption case in Velox group.
"The summons came out this week for the first few days of April,"
Interpol official Rafael Pena told Reuters.
The judge is establishing whether there were indeed illegal
transfers of funds between companies that the Velox group owned
in Uruguay, Paraguay and Argentina, including Argentinean
supermarket chain Disco, a partner of Ahold in Velox.
Mr. van der Hoeven resigned after the discovery of the US$500
million overstatement in the earnings of the Dutch retailers U.S.
unit, U.S. Foodservice.
Accountant Julio Kneit and lawyer Cristina Maeso from Uruguay
said they were claiming a US$600 million fraud claim that is
unrelated to the US$500 million discrepancy in the US.
They have teamed up with Pieter Lakeman, founder of Sobi, the
Dutch corporate watchdog, who is conducting his own inquiry into
Ahold's Latin American activities.
Under the scrutiny of these experts are the role of banks, ING,
ABN Amro and Deutsche Bank in the bailout of the then Velox
Retail Holdings in August, according to the Financial Times.
The transaction involves Ahold's buy-out of VRH's 44% stake in
Disco Ahold for US$492 million when the latter defaulted on its
loans secured with the stakes.
Ahold said the money went to VRH's banks, but Mr. Kneit contends
that the stake valued at the time at $600 million, had already
been pledged by a bank controlled by the Peirano family, which
also owned VRH, to the Uruguay Central Bank.
Ms. Maeso said she represented "about 150 small families who had
deposited their life savings with [Velox] banks".
KONINKLIJKE AHOLD: No Timetable for Internal Investigation
----------------------------------------------------------
The internal investigation into the accounting of Dutch
supermarket group Ahold will last until all the facts are
established, according to a company spokeswoman.
The retailer, which recently disclosed a US$500 million
overstatement of profits at its U.S. Foodservice unit, has not
set a fixed deadline for the investigation.
"The focus is on accuracy rather than speed," the source told
Reuters adding that, "They [investigators] want to make
absolutely sure that they get it right."
Ahold did not name people involved in the internal forensic
probe, although it is believed it will exclude the group's
auditing firm Deloitte & Touche.
PriceWaterhouseCoopers is deemed as the mostly likely
investigator, according to accounting sources.
The world's third-largest retailer also faces inquiry from the
U.S. Securities and Exchange Commission, and the Dutch financial
watchdog and Euronext, relating to the recording of its income
from "vendor allowances" or discounts as credit which did not
materialize as hard cash.
Ahold owns U.S. grocery chains Bi-Lo and Stop & Shop as well as
Dutch market leader Albert Heijn.
It recently appointed a temporary board with Henny de Ruiter,
formerly supervisory board chairman, as interim CEO, and Smith &
Nephew's non-executive chairman, Dudley Eustace, as interim CFO.
The team will continue the review of all of the company's
strategic options, expectedly likely to include disposals on non-
core assets to help it reduce EUR12.4 billion (US$13.3 billion)
in debt.
CONTACT: CONTACT: KONINKLIJKE AHOLD
Albert Heijnweg 1
1507 EH Zaandam, The Netherlands
Phone: +31-75-659-9111
Fax: +31-75-659-8350
Home Page: http://www.ahold.com
Contact:
Henny de Ruiter, Interim CEO
Dudley Eustace, Interim CFO
PRICEWATERHOUSECOOPERS
1301 Avenue of the Americas
New York, NY 10019
Phone: 646-471-4000
Fax: 646-394-1301
Home Page: http://www.pwcglobal.com
Contact:
Andrew Ratcliffe, Global Chairman
Samuel A. DiPiazza, Global CEO and Board Member
Geoffrey E. Johnson, Global CFO
Eugene Donnelly, Vice Chairman, Operations (US)
In Netherlands
Alkmaar
PricewaterhouseCoopers
Kantorenpark Houtvaart
Wognumsebuurt 1
1817 BH Alkmaar
Mail Address:
PO Box 379
1800 AJ Alkmaar
The Netherlands
Phone: [31] (72) 5190 800
Telecopier: [31] (72) 5150 582
DELOITTE & TOUCHE
1633 Broadway
New York, NY 10019-6754
Phone: 212-492-4000
Fax: 212-492-4001
Home Page: http://www.deloitte.com
Piet Hoogendoorn, Chairman
James E. (Jim) Copeland Jr., CEO
William A. Fowler, CFO
KONINKLIJKE AHOLD: Pomerantz Firm Sets Deadline for Investors
-------------------------------------------------------------
According to Pomerantz Haudek Block Grossman & Gross LLP
(http://www.pomerantzlaw.com),which has filed a class action in
the against Royal Ahold NV, 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 Royal Ahold
during the period between May 15, 2001 and February 21, 2003,
inclusive, investors have until Monday April 28, 2003 to seek
appointment by the Court as one of the lead plaintiffs in this
action.
The lawsuit alleges that defendants issued 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, Royal 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, Royal Ahold's ADRs fell US$6.52, or 61%, to US$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 Monday 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.
CONTACT: POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP
Contact: Andrew G. Tolan, Esq.
Phone :(888) 476-6529 ((888) 4-POMLAW)
E-mail: agtolan@pomlaw.com
UNITED PAN-EUROPE: Announces Ratification of Akkoord in Court
-------------------------------------------------------------
United Pan-Europe Communications N.V., one of the leading
broadband communications companies in Europe, announces that the
Dutch court in Amsterdam ratified (gehomologeerd) the akkoord
(plan of composition). This decision is subject to an appeal
period of eight working days starting March 13th. The
ratification by the Dutch Court is one of the final steps in the
ongoing recapitalzation process of UPC.
*****
UPC declared Chapter 11 bankruptcy in the United States and
received creditor protection in Netherlands as part of a
restructuring process that should erase two-thirds of the group's
EUR10.4 billion debt burden.
After the restructuring, Liberty Media is expected to increase
its control over UPC, by virtue of its significant holding in the
Dutch group via its unit UnitedGlobalCom.
===========
P O L A N D
===========
BRE BANK: Informs Public About Schedule of Warrants Issue
---------------------------------------------------------
The Management Board of BRE Bank SA informs that the following
warrants will be issued on March 24, 2003:
--50.000 twentieth six-series call warrants on the Warsaw Stock
Exchange Index WIG20 coded W20F120BRE, execution price PLN 120;
--50.000 twentieth six-series put warrants on the Warsaw Stock
Exchange Index WIG20 coded W20R120BRE, execution price PLN 120;
--50.000 twentieth seven-series call warrants on the Warsaw Stock
Exchange Index WIG20 coded W20I130BRE, execution price PLN 130;
--50.000 twentieth seven-series put warrants on the Warsaw Stock
Exchange Index WIG20 coded W20U110BRE, execution price PLN 110.
OCEAN COMPANY: Plans to Appeal Court's Ruling on Bankruptcy
-----------------------------------------------------------
The management of Ocean Company is planning to appeal a
bankruptcy ruling by declaring that a potential investor is
interested in buying its debts and taking it over.
Warsaw Business Journal cited Ocean President Szymon Jachaz
saying: "Annulment of the court ruling is our only chance and
that is why we will use this option."
Sieradz's Regional Development Agency, Ocean's potential
investor, has originally expressed willingness to buy the company
prior to the court's decision. However, creditors rejected the
offer due to the lack of proof that the Sieradz company had the
necessary money for the transaction.
Meanwhile, the receiver warns that there are problems with
selling Ocean's assets.
Receiver proxy Ryszard Cytynski said assets of the company are
"scattered across the country and are mostly industrial" adding
that current demand for them is low.
CONTACT: OCEAN COMPANY S.A.
Ul. Opoczynska
12/5 02-526
Warszawa
Phone: (022) 646-06-10
Fax: (022) 646-27-53
E-mail: ocean@ocean.pl
Homepage: http://www.ocean.pl
===========
R U S S I A
===========
ALFA BANK: Outlook Revised to Positive, Ratings Affirmed
--------------------------------------------------------
Standard & Poor's Ratings Services said Friday that it had
revised its outlook on Russia-based Alfa Bank to positive from
stable. At the same time, the 'B-' long-term and 'C' short-term
counterparty credit ratings on the bank were affirmed.
"The change in outlook reflects the bank's good business
franchise and the improved diversity of its business lines in the
context of macroeconomic stability in Russia," said Standard &
Poor's credit analyst Ekaterina Trofimova.
During the past three years, the bank has expanded its commercial
network, widened its financial services offerings, and hired new
staff in key areas, such as retail and investment banking,
information technology, and risk management. These changes leave
the group well positioned to develop its banking business across
the expanding domestic economy. These positive factors are offset
by the bank's large single-party concentrations, including to
other Alfa group members, and the group policy of running Alfa
Bank at a relatively low level of capital with respect to risk
assets.
"Alfa Bank's aggressive expansion, which is likely to continue
throughout 2003, leaves the bank vulnerable to a downturn, but
well positioned to prosper if the economic environment in Russia
continues to improve," added Ms. Trofimova. "The capital policy
set by Alfa Bank's owners will be a determining factor as the
ratings develop. We will also follow closely Alfa Bank's
potential to better diversify credit risk and improve operating
efficiency."
ALROSA CORP.: Rating Raised to 'B' Due to New Export Quota
----------------------------------------------------------
Standard & Poor's Ratings Services said Friday it raised its
long-term corporate credit rating on Russia-based diamond mining
company ALROSA Co. Ltd. (Alrosa) to 'B' from 'B-' following the
new five-year diamond export quota the company obtained in March
2003. The outlook is stable.
"The upgrade on Alrosa reflects the new quota, which will make
sales more predictable, the improving operating environment in
Russia and access to international finance markets, and the
progress achieved by Alrosa in its underground mining program,"
said Standard & Poor's credit analyst Elena Anankina.
The rating on the company is constrained by its high capital
requirements, reduction in sales, high and increasing leverage
with a short-term maturity profile, and close links with the
Republic of Sakha (Yakutia). The rating on Alrosa is also
constrained by the company's challenging capital expenditure
program, and access to long-term finance has been limited by
country factors and industry regulations. This is offset by
ongoing lucrative sales to the South African diamond giant De
Beers (45% owned by Anglo American PLC {A-/Stable/A-2}), a solid
position in the relatively stable diamond industry, and rich
reserves--although these have not been verified by a third party.
Standard & Poor's does not expect the government of the Russian
Federation (local currency BB+/Stable/B; foreign currency
BB/Stable/B)--a 37% shareholder--to necessarily provide timely
and direct support if a situation of financial stress were to
occur at Alrosa.
"The stable outlook reflects expectations that Alrosa's free cash
flows after capital expenditure will be limited for the next few
years, and Standard & Poor's will closely monitor the company's
progress with its capital expenditure program," added Ms.
Anankina.
=====================
S W I T Z E R L A N D
=====================
CLARIANT AG: Presents Resolutions of Board of Directors
-------------------------------------------------------
Personnel measures
In a meeting last week the Board of Directors unanimously
appointed Roland Losser as CEO with immediate effect. Reinhard
Handte has resigned as CEO and member of the Board of Directors.
The Board of Directors has expressed its recognition of Reinhard
Handte's contributions to the development of the Company.
Roland Losser has been a member of the Clariant Board of
Directors for three years and acted previously for 5 years as CFO
of the company. Before moving to Clariant Roland Losser made an
international career in Sandoz.
Capital measures
Considering the company's financial situation, the shareholders
interest and the actual capital market conditions, the Board of
Directors of Clariant decided in yesterday's meeting not to make
a proposal for a capital increase at the forthcoming shareholders
meeting.
Clariant - Exactly your chemistry.
Based at Muttenz near Basel, Switzerland, Clariant is a global
leader in the field of fine and specialty chemicals. Some 28 000
employees in more than 100 group companies on five continents
generate annual sales of over CHF 9 billion.
Clariant is divided into five Divisions: Textile, Leather & Paper
Chemicals, Pigments & Additives, Masterbatches, Functional
Chemicals, Life Science & Electronic Chemicals. The Divisions
have operational autonomy within the overall group strategy, and
are entirely responsible for their own business success.
Clariant's innovative products play a decisive role in the
customers' manufacturing and treatment processes or add value to
their end-products. The company's success is based on the know-
how of its staff, and on their ability to identify new customer
needs at an early stage and to work together with customers to
find innovative, efficient solutions.
Clariant is committed to sustainable growth springing from its
own innovative strength. Our objective is to achieve 30% of sales
with products and services that are no more than five years old.
*****
In February, the chief executive of Swiss chemicals company
Clariant AG said in a news conference that restructuring costs
for 2003 and 2004 will reach between CHF230 and CHF250 million.
Chief financial officer Francois Note said CHF200 million are
planned to cut the distribution and administrative costs by
around CHF150 million annually.
Another 30 to 50 million will be used to cut the capacity at
Clariant's life science operations, he added.
CONTACT: CLARIANT INTERNATIONAL LTD
Rothausstrasse 61
CH-4132 Muttenz 1, Switzerland
Investor Relations
Phone: +41 61 469 67 48
Fax: +41 61 469 67 67
Iris Welten
Phone: +41 61 469 67 47
H olger Schimanke
Phone: +41 61 469 67 45
Daniel Leuthardt
Phone: +41 61 469 67 49
Home Page: http://www.clariant.com
SWISS INTERNATIONAL: Posts Net Loss of CHF658 MM for 2002
---------------------------------------------------------
Swiss International ("SWISS") generated consolidated total
operating revenue of CHF 4278 million for 2002 and sustained a
loss of CHF 980 million for the year. The overall annual results
were better than originally envisaged. The bottom-line result
was adversely affected by exceptional expenditure totaling CHF
322 million. Net of these non-recurring items, the loss for the
year amounted to CHF 658 million.
SWISS reported earnings before interest and taxes (EBIT) of CHF -
909 million for 2002 on total operating revenue of CHF 4278
million. The EBIT result was diminished by various non-recurring
exceptional expenditure items. The company incurred some CHF 180
million in one-off costs deriving from its expansion from a
European regional airline into an air carrier operating an
intercontinental route network and its introduction of the new
SWISS brand. Exceptional expenditure was also incurred through
value adjustments effected to the aircraft fleet and in
connection with the enforced administration of the SAirGroup.
SWISS posted a sizable net loss after financing costs of CHF 980
million in its first year of operation. Excluding non-recurring
exceptional expenditure items, the company sustained a loss of
CHF 658 million for the year.
In view of the continuing economic recession and the radical
crisis afflicting the world airline industry, SWISS took action
as early as the end of February to modify its route network and
downsize its aircraft fleet.
Balance sheet
The balance sheet total amounted to CHF 4668 million at December
31, 2002. The company held CHF 1256 million in cash, fixed-term
deposits and fixed-interest securities at year-end. After
incorporation of the loss for the year, shareholders' equity
stood at CHF 1709 million, giving a balance sheet equity ratio of
36.6%.
SWISS's full financial statements for the 2002 business year will
be published on March 25, 2003 and commented on at length at the
company's Annual Results Media Conference. In the meantime,
SWISS will not be commenting further on its annual results.
CONTACT SWISS
Corporate Communications
P.O. Box, CH-4002 Basel
Phone: +41 848 773 773
Fax: +41 61 582 3554
E-mail: communications@swiss.com
ZURICH FINANCIAL: Exits Asset Management Business in India
----------------------------------------------------------
Zurich Financial Services has announced that it has signed an
agreement for the sale of its asset management business in India
to HDFC (Housing Development Finance Corporation) Mutual Fund, a
joint venture with Standard Life Investments (UK). HDFC has USD
1.45 billion assets under management and is India's 3rd largest
and fastest growing mutual fund. Terms and conditions of the sale
have not been disclosed. The sale requires the approval of local
regulatory authorities.
Sandy Leitch, Chief Executive of Zurich Financial Services' UKISA
(United Kingdom, Ireland, Southern Africa) and Asia Pacific
Business Division said, "This decision has been taken in line
with our recently announced strategy to allocate our capital to
core markets in order to generate sustained profitable growth."
As of close of business on March 12, 2003, Zurich's asset
management business in India had approximately USD 680 million
assets der management. Zurich has begun a communications
programme designed to keep customers informed and is confident
HDFC will continue to provide customers with a high level of
service and fund performance.
The agreed sale does not affect Zurich's other businesses in
India.
Zurich Financial Services is an insurance-based financial
services provider with an international network that focuses its
activities on its key markets of North America, the United
Kingdom and Continental Europe. Founded in 1872, Zurich is
headquartered in Zurich, Switzerland. It has offices in
approximately 60 countries and employs about 68,000 people.
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 SERVICES (UK)
Jane Reed-Thomas
Phone: +44 (0) 1489 561686
Fax: +44 (0) 1489 564471
Mobile: +44 (0) 7768 803920
E-mail: jane.reed-thomas@uk.zurich.com
===========================
U N I T E D K I N G D O M
===========================
AMEY PLC: Shareholders Approve Disposal of PFI Portfolio
--------------------------------------------------------
At Amey's Extraordinary General Meeting, shareholders approved
the resolution put to the meeting for the disposal of the PFI
Portfolio to Laing Investments Limited. Now that shareholder
approval has been obtained, it is expected that completion of the
PFI Portfolio disposal will occur shortly. In addition, the
Group's new banking facilities are expected to become
unconditional at the same time as the PFI disposal is completed.
*****
The sale price is GBP29.1 million, and Amey has until June 30 to
buy back its stake in the Tube Lines Consortium.
Amey chairman Sir Ian Robinson, according to the Financial Times,
said he was "comfortable" that the company would be able to buy
back the contract.
CONTACT: CARDEWCHANCERY
Anthony Cardew/Nadja Vetter
Phone: 020 7930 0777
ASHTEAD GROUP: Defaults on Bank Facility Due to Problems in US
--------------------------------------------------------------
The Board of Ashtead Group plc announced on Monday, March 10,
2003 that there had been a failure to reconcile properly certain
balance sheet accounts at the group's US subsidiary, Sunbelt
Rentals Inc. Since then the Board has been reviewing whether this
has an impact on its banking arrangements. As accounting
investigations are ongoing, the Company is unable to provide
definitively the usual representations and warranties required in
connection with the rollover today of advances under its senior
bank facility. Consequently, an event of default will subsist
under that facility from later today.
In the light of the above a meeting of the bank group will be
called at the end of next week to review the position, with a
view to developing a proposal to resolve the situation. In the
meantime, the Company has decided for the time being not to make
the interest payments due today under the senior bank facility.
The Directors have continued to keep a tight rein on capital
expenditure and to keep the Group's costs under control. As a
result, the Group remains strongly cash generative producing net
free cash flow (after capital expenditure and interest charges)
in the third quarter.
A further announcement will be made in due course.
*****
According to the Financial Times, Ashtead is understood to have
called in Close Brothers to advise it on a new capital structure.
Ashtead is set to negotiate with its bankers--a syndicate of 40
led by Bank of America, Lloyds and Citibank.
At present, it is using an overdraft facility from Bank of
America and Lloyds for short-term finance while the talks are
going.
Shares in the company, which rents out equipment to industrial
and commercial users, fell 67% after the announcement of default
on the US$200 million loan.
The report also prompted WestLB Panmure, the house broker, to cut
its full-year estimates from GBP23.5 million to GBP14 million and
its free cash flow by GBP9 million to GBP35 million.
The company had total debt of GBP644 million (US$1 billion) as of
October 31.
BRITISH AIRWAYS: War to Force Job Cuts and Aircraft Grounding
-------------------------------------------------------------
British Airways chief executive Rod Eddington has warned that
with the outbreak of war in Iraq, air traffic could fall by 10-
20%.
The Financial Times reported that conflict in the Middle East
would trigger the grounding of aircraft, the loss of more jobs in
aviation and the risk of further airline bankruptcies or
liquidations, in particular in the U.S.
Thus, Mr. Eddington said BA would have to deal with the temporary
drop in traffic by grounding aircraft and cutting jobs. The
airline would probably seek to accelerate the additional 3,000
job cuts already planned for the next 12 months, on top of the
10,000 job cuts since August 2001.
Workforce would also be reduced by offering more temporary unpaid
leave and possibly through voluntary severance packages.
Frequencies to the region had already been cut to match falling
demand.
Aside from United Airlines and U.S. Airways, two leading carriers
in the U.S. are already in bankruptcy. American Airlines could
also be forced to seek Chapter 11 protection from its creditors
unless it was able to negotiate "substantial" cuts in pay and
conditions from its workforce, Mr. Eddington warned.
American Airlines is the world's largest carrier and BA's partner
in the Oneworld alliance.
Furthermore, Mr. Eddington said the "great unknown" in the
mounting airline crisis was what further role the U.S. government
would play in bailing out U.S. carriers, considering the "huge
amount thrown at U.S. carriers after the September 11 event."
"If anything approaching that happens again, there will be real
implications for European airlines. We will be competing with
increasingly-subsidized U.S. carriers," he added.
Meanwhile, the impending war in Iraq has prompted BA to pull out
crew members out of most Middle East countries and has begun
operating its flights to Abu Dhabi, Bahrain, Doha, Dubai, Jeddah,
Kuwait, Muscat and Riyadh through a mini-hub at Larnaka, Cyprus
which has become its main crew base for overnight stays in the
region.
The aim is to "get the crews as close to the Middle East" as
possible without "having them in the Middle East, so we can
continue to operate safely for as long as possible," said Mr.
Eddington.
BA is especially aware of the dangers in the region after having
had one of its 747 airliners trapped and eventually destroyed at
Kuwait airport in the last Gulf war. Some of its crewmembers were
used as human shield hostages in Iraq.
CONTACT: BRITISH AIRWAYS PLC
Waterside, Harmondsworth
London UB7 0GB, United Kingdom
Phone: +44-20-8562-4444
Fax: +44-20-8759-4314
Toll Free: 800-545-7644
Home Page: http://www.british-airways.com
CORUS GROUP: Long-Term Ratings Cut to 'BB-', Watch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services said Friday it lowered its
long-term corporate credit and senior unsecured debt ratings on
U.K.-based steel consortium Corus Group PLC and related entities
to 'BB-' from 'BB'. The ratings remain on CreditWatch with
negative implications, where they were placed on March 12, 2003.
"The downgrade follows the announcement that the group will not
be allowed to proceed with the sale of its Dutch aluminum
division to Pechiney SA of France, as had been previously
expected, following internal dissension at Corus," said Standard
& Poor's credit analyst Olivier Beroud.
Standard & Poor's will continue to monitor the situation to
determine whether the group is likely to obtain an extension, or
renewal, of its key EUR1.4 billion ($1.5 billion) bank line,
which matures in January 2004. The group's failure to dispose of
its aluminum division will undoubtedly be a set back in its
negotiations concerning this bank line. Any future rating
actions, which could be by one or more notches, will depend on
the following factors:
-- Whether the sale of the aluminum assets to Pechiney will
eventually be allowed to go ahead or whether the group will be
forced to break up following the internal dissensions that have
led to the disposal being blocked.
-- Whether Corus will manage to meaningfully extend its short-
term bank lines--which currently expire in January 2004--or
replace them with long-term financing and, therefore, ease a
liquidity situation that could become constrained.
-- Whether Corus can generate enough free operational cash flows
in 2003 and beyond to cover its capital expenditures, dividends,
interest, and taxes.
Although Standard & Poor's expects that Corus will continue to
lag its main European competitors in terms of margins and return
on capital, the group will benefit from favorable steel prices
and the continual strength of the euro in first-half 2003. The
ratings on the group reflect Corus' weak business position,
despite its continuous efforts and progress in the restructuring
of its U.K. and European operations.
Standard & Poor's will meet with the management of Corus in the
coming weeks to discuss the issues mentioned above in an effort
to resolve the CreditWatch status.
CORUS GROUP: Chief Executive Steps Down From Office
---------------------------------------------------
In the light of the Company's performance, the Board, including
Mr. A.P. Pedder, Chief Executive, has concluded that a change of
leadership is required. Mr. Pedder has tendered his resignation
and this has been accepted with immediate effect. The procedure
for the recruitment of a new Chief Executive is underway.
Mr. Stuart Pettifor, a main Board executive director, is
appointed Chief Operating Officer and will take responsibility
for all operational matters.
Sir Brian Moffat has agreed to defer his planned retirement and
will become full time Chairman until his successor is appointed.
CORUS GROUP: Records Operating Loss of GBP141 Million for 2002
--------------------------------------------------------------
The Consolidated Profit and Loss Account, Consolidated Balance
Sheet, Statement of Total Recognised Gains and Losses,
Reconciliation of Movements in Shareholders' Funds and the
Consolidated Cash Flow Statement shown in respect of the year
ended 28 December 2002 are extracted from the full accounts for
that year which were approved by the Board of Directors on 14
March 2003 and will be filed with the Registrar of Companies. The
financial information contained in this announcement does not
constitute statutory accounts within the meaning of Section 240
of the Companies Act 1985. The report of the auditors on these
accounts is unqualified and does not contain a statement under
Section 237 (2) or (3) of the Companies Act 1985.
The audit report refers to a fundamental uncertainty in respect
of the application of the going concern basis described in the
Review of the Period on page 10, "Going concern".
The Report and Audited Financial Statements will be mailed to
shareholders later this month at which time copies will also be
available from the Secretary's Office, Corus, 30 Millbank, London
SW1P 4WY, or by telephoning 0800 484113.
KEY HIGHLIGHTS
-- Operating loss before exceptional items for second half year
reduced to GBP141m (GBP252m in first half).
-- Non-cash impairment charges for carbon steel operations of
GBP109m and UK deferred tax write-off of GBP42m.
-- Net loss for year of GBP458m.
-- Net borrowings reduced by GBP324m during 2002.
CHAIRMAN'S STATEMENT
"The underlying results for the Group for the year were
marginally below the level of the previous year with a Group
operating loss of GBP393m (2001: GBP377m), before taking into
account exceptional items of GBP53m (2001: GBP8m). The net loss
after tax and minority interests for the year amounted to GBP458m
and, in the light of this result, the Board has decided not to
recommend the payment of a dividend in respect of 2002.
While further progress was made in securing improvements in
operational performance and efficiency, the absence of any real
global economic recovery was the major factor, which led to the
poor results for the year. The trend through 2002 saw prices in
Europe, Corus' major market, fall sharply during the first
quarter prior to some modest recovery in the second quarter and,
subsequently, further increases during the second half. As a
result, for the second half year the Group incurred an operating
loss of GBP141m, before exceptional items, as compared with
GBP252m in the first half, with an improvement of GBP124m in
carbon steel being partially offset by a fall of GBP13m in the
operating profit of aluminum.
At the end of the year, net debt amounted to GBP1,236m and
gearing was reduced to 46%. Net proceeds from acquisitions and
disposals amounted to GBP445m while ongoing cash flow demands
amounted to GBP121m, giving a reduction in net debt of GBP324m in
the year.
The year under review for Corus also proved to be very difficult
and frustrating in other respects. The implementation of the
Group's strategy of focusing on its carbon steel operations began
with the disposal of our stainless steel interests in
AvestaPolarit, the completion of the sale of our 20% interest in
the aluminum business of Aluminerie Alouette and progressing the
sale of the Group's remaining aluminum assets. There were also a
number of smaller transactions including the acquisition of two
downstream carbon steel operations, one in Sweden and the other
in the U.K. However, and despite the strong strategic rationale,
discussions regarding the proposed merger between Corus and CSN
in Brazil, announced in July, regrettably had to be terminated in
November due to the deterioration of, and ongoing uncertainties
in, the global business environment and financial markets.
The sale of our aluminum rolled products and extrusions
businesses to Pechiney was agreed in principle in October for
approximately GBP543m. The businesses are owned by Corus
Nederland BV, and the sale was, inter alia, subject to the
approval of that company's Supervisory Board. In the event and
despite the recommendation of the Management Board of Corus
Nederland BV, the Supervisory Board was not willing to give its
approval. Following an unsuccessful petition to the Court in
Amsterdam for that decision to be set aside, the sale will not
take place.
The decision of the Supervisory Board to reject the sale of the
aluminum businesses was taken in the face of detailed proposals
by Corus Group to meet the legitimate concerns that the
Supervisory Board had expressed for the consequences of that sale
for Corus Nederland BV. The Board views this outcome as extremely
disappointing and is reviewing the implications of it on its
carbon steel strategy and related funding plans.
The carbon steel strategy is focused on eliminating the Group's
losses, which continue to emanate from the UK despite the steps
that have been undertaken in recent years to reduce capacity and
improve competitiveness. Unfortunately the progressive decline in
UK manufacturing, coupled with the strength of sterling and
increased penetration from steel imports, has undermined these
initiatives. It is clear, however, that Corus' UK losses have got
to be reversed and this will inevitably lead to significant
further capacity reductions and concentration of operations onto
fewer sites. A review by the Board is currently in progress and
an announcement will be made on its findings as soon as possible.
The proceeds of the aluminum sale would have provided the
capacity to finance the measures needed to reduce capacity in the
UK but, with the sale no longer proceeding, the Group will need
to look afresh for finance from equity and debt providers, and
from the sale of non-core assets. The timing and extent of
further actions to be taken will be largely dependent upon the
availability of such further financing. Discussions in respect to
an extension of the existing banking facilities due to expire at
the end of January 2004 were being pursued as part of the
aluminum disposal process, and discussions also were taking place
to replace these facilities for the medium term. As the sale is
not proceeding, priority will now be given to agreeing a new
three-year facility from January 2004. The funding plans for the
Group going forward are, therefore, an essential part of the
current Board review.
The Group faces the challenges of 2003 with a much more stable
plant configuration following the resumption in January of a two
blast furnace operation at Port Talbot, and there are no planned
blast furnace outages. As to the market scene, the year has
started as expected with subdued demand in the U.K. and flat
demand in mainland Europe. However, despite this situation prices
have improved for flat and long products, and the recent
weakening of sterling against the Euro should bring some benefits
in the UK.
The last eighteen months has seen a significant erosion of global
equity prices. The market value of Corus, however, has been
further eroded by the continuing loss making situation and
refinancing concerns together with the difficulties encountered
with the proposed merger with CSN and with the divestment of our
aluminum business as outlined above. The Board and management are
very conscious and concerned about this situation and are
determined to take the necessary action to restore market
confidence."
Sir Brian Moffat
14 March 2003
REVIEW OF THE PERIOD
Summary of operating results
Group turnover for 2002 amounted to GBP7,188m (2001: GBP7,699m)
and operating costs totalled GBP7,634m (2001: GBP8,084m),
including exceptional items of GBP53m, and the Group incurred an
operating loss of GBP446m (2001: GBP385m). The net loss for the
year amounted to GBP458m (2001: GBP419m). The trend through 2002
saw turnover increase to GBP3,612m for the second half year from
GBP3,576m for the first half. Operating costs increased from
GBP3,783m for the first half year to GBP3,851m for the second
half resulting in a Group operating loss of GBP239m for the
second half year as compared with GBP207m for the first half.
Excluding the impact of exceptional items, the Group operating
loss for the year totaled GBP393m, with a reduced level of loss
for the second half year, which at GBP141m compared with GBP252m
for the first half. Operating costs for the second half year
included GBP23m in respect of transaction costs, principally
relating to the aluminum sale and the terminated merger with CSN.
Year-on-year and half-yearly comparisons are discussed in more
detail below in the context of 'Carbon steel', 'Aluminium' and
'Discontinued operations'.
Carbon steel
Turnover for the year totaled GBP6,231m (2001: GBP6,534m) and
included the impact of reduced levels of distribution, further
processing and other turnover which totaled GBP1,489m (2001:
GBP1,742m). Product turnover for 2002 fell by 1% to GBP4,742m
(2001: GBP4,792m) reflecting lower sales volume as average
revenue was virtually unchanged. For the second half of 2002,
product turnover of GBP2,381m was 1% above the level of the first
half reflecting the net impact of a 3% rise in average revenue
and a 2% fall in sales volume.
In the U.K., demand for Corus' main finished products during 2002
reduced to 10.65mt (2001: 10.94mt) as U.K. manufacturing output
fell by some 4%, driven by the adverse impact of the weak global
economy and the strength of sterling against the euro. Corus'
sales volume in the U.K. totaled 5.90mt (2001: 6.15mt), of which
5.37mt (2001: 5.49mt) were main finished products. While the
Group's UK market share for 2002 was, therefore, maintained at
around 50%, with the share increasing to around 52% for the
second half of 2002, this was against a background of a
continuing downward trend in U.K. demand.
In other European markets, manufacturing output also remained
weak during 2002 and there was no growth in demand from steel-
consuming industries within the EU, with steel consumption
falling by some 1.5%. Despite this difficult market environment,
Corus' sales volume in European markets (excluding U.K.)
increased to 8.14mt (2001: 7.99mt).
Sales into Europe (including the U.K.) accounted for over 80% of
carbon steel product turnover during the past two years and have
been subject to significant movements in selling prices. During
2001, European spot prices fell sharply for flat products, a
trend which continued into the first quarter of 2002. From April,
European carbon steel producers began to raise selling prices and
there was a progressive improvement during the second half of the
year, driven largely by production cutbacks by steel producers
and some rebuilding of stocks by customers, despite continuing
economic uncertainty and increasing concerns about the timing of
any recovery. However, the continuing weakness of end-user demand
was such that increases in spot prices of hot and cold rolled
coil were not able to be passed on by downstream businesses to
customers on a full and timely basis and, as a result of this and
other factors as discussed below, trends in Corus' average
revenues, particularly for flat products, do not reflect the
movements in spot market prices.
Outside Europe, there was a modest recovery in U.S. demand
through the first three quarters of 2002 which, combined with
restrictions on imports driven by Section 201 Safeguard measures
which had been implemented in March 2002, led to U.S. prices
rising sharply through to September 2002. However, the final
quarter of the year saw some weakening of demand, reflecting the
faltering recovery in the U.S. economy, at a time when both new
and idled capacity was being activated. As a consequence, the
supply/demand balance in this region deteriorated towards the end
of 2002. In the Asia-Pacific region, steel production increased
during 2002 despite persistently weak demand in Japan, as China
saw continued strong growth through the year. Corus' sales volume
outside Europe during 2002 totaled 2.59mt including 1.68mt in
North America.
Against the above background, average revenue for Corus' carbon
steel products for 2002 was virtually unchanged at GBP285pt
(2001: GBP284pt). However, this masked significant reductions in
average revenues of certain downstream businesses as a result of
continuing weak end-user demand. Spot price volatility is not
fully reflected in Corus' average revenues as a result of such
factors as contract pricing, order backlogs, exchange rate
movements, and the more stable pricing of quality extras and
added value services. Sales mix changes, both in product and
market terms, also serve to distort comparisons of spot prices
and Corus' average revenues. In terms of the two half years,
average revenue was GBP289pt for the second half, 3% above the
level for the first half, although the weakness of end-user
demand was further demonstrated with a number of Corus'
downstream businesses seeing lower average revenues for the
second half year.
Carbon steel operating costs totaled GBP6,698m (2001: GBP6,980m)
but excluding exceptional items of GBP45m were 5% lower than 2001
at GBP6,653m (2001: GBP6,970m), with the key influences being
lower levels of sales, and the benefits of the Group's continuing
cost and efficiency improvement measures which, in some areas,
were partially offset by higher costs. The impact of lower sales
arose through the combination of a reduction in sales volume of
carbon steel products for 2002 to 16.62mt (2001: 16.88mt), and a
fall in the level of turnover through distribution, further
processing and other turnover. Carbon steel costs for 2002 were
adversely affected by the impact of blast furnace outages at
IJmuiden and Port Talbot.
Ongoing cost and efficiency improvement measures saw benefits
being secured on a number of fronts through 2002. The major UK
restructuring program that had been announced in 2001 was
completed, in terms of site closures and re-configurations, ahead
of schedule in June 2002. Employment costs were 4% below the
level of the previous year at GBP1,389m (2001: GBP1,449m), and
reflected the continuing manpower productivity improvements,
particularly in the U.K. In the Netherlands, the "World Class
IJmuiden" project, which was launched in September 2001 targeting
margin improvements of EUR300m (approximately GBP185m) by early-
2004, had secured around two-thirds of its target by the end of
2002 through a combination of cost reduction initiatives, and
sales mix and volume enhancements. In the U.K., the "High
Performance Strip" project was launched during 2002, with
targeted benefits of GBP150m through service and cost
improvements by early-2005.
Aluminum
Turnover for 2002 amounted to GBP957m (2001: GBP1,085m) and was
12% below the level of the previous year, with falls of 10% in
total sales volume and of 2% in average revenue. Sales of primary
metal were the main influence as volume was 30% below the level
of 2001, and average revenue fell by 7%. For rolled products and
extrusions, aggregate sales volume was virtually unchanged but
turnover and average revenue for 2002 fell by 7%. This was
largely a result of lower average LME prices, which were down by
9% in 2002, and the adverse effects of the weak economic
situation particularly in Europe and North America. The global
slowdown in the aircraft market, however, had only a minor impact
and was more than offset by increased sales to the automotive and
heat exchanger industries. In terms of the trend through 2002,
total sales volume was 8% lower for the second half and turnover
fell by 9% to GBP457m mainly due to the seasonal effects of
customer shutdowns in the Summer and over Christmas.
Excluding the impact of exceptional items of GBP8m (2001: credit
of GBP2m), operating costs amounted to GBP928m (2001: GBP1,029m)
and were 10% lower than the level of the previous year, mainly
reflecting the fall of 10% in overall sales volume, partially
offset by an increase in employment costs. The second half of
2002 saw a 6% fall in costs to GBP449m, excluding exceptional
items, largely as a result of lower overall sales volume, which
reduced by 8%.
Against the background outlined above the operating profit for
2002, excluding exceptional items, amounted to GBP29m (2001:
GBP56m), significantly below the level of the previous year and,
as pressures on margins intensified during the year, the second
half operating profit, excluding exceptional items, fell to
GBP8m.
Discontinued operations
On 22 January 2001 Avesta Sheffield, the Group's 51%-owned
stainless steel business, ceased to be a subsidiary of Corus.
From that date, AvestaPolarit became an associated undertaking
with Corus holding a 23.2% stake. On 1 July 2002, Corus announced
the sale of its stake in AvestaPolarit (see 'Acquisitions and
disposals' below) and consequently the stainless steel activities
have been treated as discontinued operations.
Exceptional items
For 2002, there was a net charge of GBP53m (2001: GBP8m) in
respect of exceptional items, of which GBP45m related to carbon
steel activities and GBP8m related to aluminum. The net charge
included a net credit of GBP45m for the first half year which
mainly related to changes in cost estimates in respect of
obligations for environmental and contractual liabilities for
previously announced site closures and, in the second half, a net
charge of GBP98m. The second half included non-cash impairment
charges arising from the continuing losses in carbon steel
operations relating to the value in use of fixed assets (GBP89m)
and to goodwill in investments (GBP20m), the impact of which was
partially offset by further releases following changes in cost
estimates.
Profit and loss account
The Group operating loss, after exceptional items, amounted to
GBP446m and translated into a total operating loss for 2002 of
GBP425m after taking account of Corus' share of operating results
of its associated undertakings of GBP21m, of which GBP17m related
to AvestaPolarit. There was a net profit of GBP96m on disposals
of fixed assets which included GBP65m in respect of the insurance
settlement relating to the rebuilding of the no. 5 blast furnace
at Port Talbot which took place during 2002, following an
explosion in late-2001 that had made the furnace inoperable. The
balance of GBP31m mainly related to profits on sales of
properties. The net profit on disposals of Group undertakings of
GBP19m included a profit of GBP60m on the sale of Corus' interest
in the Aluminerie Alouette smelter, which was completed in
September 2002 (see 'Acquisitions and disposals' below), and a
loss on disposal of GBP48m on the sale of the Group's former
stainless steel interests, comprising a goodwill transfer from
reserves (GBP33m) and goodwill written off (GBP15m).
After taking account of net interest payable of GBP94m a loss
before taxation of GBP404m was incurred. The net tax charge for
the year amounted to GBP61m and included an impairment related
write-off of deferred tax of GBP42m. After taking account of a
net credit of GBP7m for minority interests the Group incurred a
net loss for the year of GBP458m.
Acquisitions and disposals
On 1 July 2002, Corus announced the disposal of its 23.2% stake
in AvestaPolarit to Outokumpu and total proceeds amounted to
EUR555m (approximately GBP356m).
On 17 July 2002, Corus announced that its board and that of CSN
in Brazil reached agreement in principle on the terms of a
proposed merger of the two companies. However, on November 13,
2002, Corus announced that its Board had decided to terminate the
proposed transaction as a result of ongoing uncertainties in the
global business environment and financial markets.
On August 16, 2002, Corus announced that it has agreed to sell
its 20% interest in the Aluminerie Alouette smelter to Alcan for
US$165m (approximately GBP107m) in cash, with a consideration for
working capital on completion.
On October 23, 2002, Corus announced that it had reached
agreement in principle to the sale of its aluminum rolled
products and extrusions businesses to Pechiney S.A. for EUR861m
(approximately GBP543m). The businesses are owned by Corus
Nederland BV and the agreement was conditional upon internal
consultation, advice and approval processes by both Corus and
Pechiney. Despite the recommendation of the Management Board of
Corus Nederland, the Supervisory Board of that company was not
willing to give its approval. Following an unsuccessful petition
to the Enterprise Section of the Amsterdam Court of Appeal for
the decision of the Supervisory Board to be set aside, the sale
did not proceed. As a result a break fee of EUR20m is payable by
Corus to Pechiney. Additionally, Pechiney has exclusive
negotiation rights over the business until 23 October 2003.
In August 2002, Corus announced the acquisition of Erik Olsson
and Soner of Sweden, a profiler of steel sheets for roofing and a
supplier of pre-engineered industrial and agricultural buildings,
for GBP9m.
In November 2002, Corus announced its intention to acquire 100%
of the equity of Precoat International, one of the leading
independent precoated steel service centres in the UK. Following
acceptance by Precoat's shareholders and receipt of appropriate
regulatory consents, the cash purchase was completed on 27
December 2002 for approximately GBP7m.
In March 2002, Corus sold its stake in Galtec to Sidmar for
proceeds of GBP12m. Also during 2002, the trade and assets of the
Group's 25%-owned joint venture Trico Steel, in the US were sold
to Nucor. Prior to this, Trico had filed for Chapter 11
protection from creditors and was fully provided against in the
Group accounts for 2000.
Capital expenditure
Capital expenditure for the year amounted to GBP188m (2001:
GBP166m). The major investment scheme, at a total capital cost of
some GBP65m, was the rebuild of the Port Talbot No. 5 blast
furnace which was lit on January 2, 2003.
Employees
Numbers employed at the end of 2002 totaled 50,900 as compared to
52,700 at the end of 2001. The net reduction of 1,800 comprised
job losses related to previously announced efficiency measures.
In this context, the average weekly numbers employed during the
year fell by 4,000 to 51,600.
Cash flow and financing
The net cash inflow from operating activities amounted to GBP41m,
the key feature being a net reduction in working capital of
GBP162m, which included the benefit of GBP181m from the
securitization of trade debtors. A net cash outflow from capital
expenditure and financial investment of GBP57m was net of GBP112m
from the sale of tangible fixed assets. There was a net cash
inflow of GBP445m from acquisitions and disposals, which mainly
related to the sale of the Group's stake in AvestaPolarit
(approximately GBP356m) and the sale of Corus' interest in the
Aluminerie Alouette smelter (approximately GBP107m). After taking
account of those and other movements, net borrowings reduced to
GBP1,236m at the end of 2002 and represented a gearing ratio of
46% to net tangible assets.
On 11 January 2002, the Company issued EUR307m of 3% guaranteed
unsubordinated bonds due 2007, convertible into shares of Corus
Group plc. Almost all of the bond issue proceeds (EUR300m) and
most of the funds from the securitisation of trade debtors
(EUR240m) were used to pay down and cancel part (EUR540m) of a
syndicated bank facility of EUR2,400m, which had been arranged in
January 2001.
The bank facility was further reduced on 30 December 2002 by
voluntary cancellation of EUR460m, of which EUR260m would have
matured in January 2003 and EUR100m would have matured in March
2003. The balance of the remaining facility (EUR1,400m) matures
in January 2004. The status of negotiations to replace this
facility is referred to below.
Going concern
In the twelve-month period to 28 December 2002, the Group partly
met its day-to-day working capital requirements through a
syndicated revolving multi-currency loan facility ('syndicated
facility'). At 28 December 2002 this facility was EUR1,860m of
which EUR455m was utilised. The facility was reduced following
the period end, on 30 December 2002, by voluntary cancellation of
EUR460m, of which EUR260m would have matured in January 2003 and
EUR100m in March 2003. The facility now stands at EUR1,400m. This
facility contains two financial covenants: that the Group gearing
ratio (based on net tangible worth) should not exceed 75%; and,
that net tangible worth should not be less than GBP2,500m. At 28
December 2002 net gearing was 46% and net tangible worth was
GBP2,664m. This facility expires on 30 January 2004.
On 23 October 2002 the Company announced that it had agreed in
principle to the sale of its aluminum rolled products and
extrusions businesses and that a definitive sale and purchase
agreement would be entered into following completion of internal
consultation, advice and approval processes. The Supervisory
Board of Corus Nederland BV decided on 10 March 2003 to reject
the recommendation to proceed with the sale, and a petition to
the Enterprise Chamber of the Amsterdam Court of Appeal to set
this decision aside was unsuccessful.
The Group's future strategy is focused on eliminating the Group's
losses in the U.K. This will inevitably lead to significant
further capacity reductions and concentration of operations onto
fewer sites. A review by the Board is currently in progress and
an announcement on its findings will be made as soon as possible.
It was intended that the proceeds of the sale of the aluminum
businesses would provide the capacity to finance the measures
needed in the U.K. However, in the light of the failure to gain
approval for the sale, the Group will need to look afresh for
finance from equity and debt providers and from the proceeds of
disposals of non-core assets. The timing and extent of the
further actions to be taken will be largely dependent upon the
availability of such further financing.
In parallel with the sale of aluminum, discussions were well
advanced with the Group's bankers on both an extension to the
existing syndicated facility and a new three-year facility.
Discussions will now take place with the Group's bankers on a new
three year facility that will take into account the Group's
operational requirements based on its business plans, revised in
the light of the sale of the aluminum businesses no longer taking
place, and having regard to other financing and strategic options
available to the Group. In the light of the information currently
available, the directors believe that it should be possible to
agree new facilities with the banks that are acceptable to the
Company to be available before the existing facilities expire.
The financial statements have been prepared on a going concern
basis, which assumes that the Group's bankers continue their
support by providing new facilities acceptable to the Group to
replace the existing syndicated facilities. Should the banks not
support the Group in this respect, adjustments would have to be
made to reduce the balance sheet values of assets to their
recoverable amounts, to provide for further liabilities that
might arise and to reclassify fixed assets and long-term
liabilities as current assets and liabilities.
Whilst the directors presently cannot be certain as to the
outcome of the matters mentioned above, they believe that it is
appropriate for the financial statements to be prepared on a
going concern basis.
Accounting policies
The financial statements to December 28, 2002 have been produced
in accordance with the applicable accounting standards in the UK.
They also include a reconciliation of earnings and equity under
US GAAP as set out in note 11 of "Supplementary Information" in
this release. Preparation of financial statements includes the
need to make assumptions and estimations that affect the amount
of assets, liabilities, revenues and expenses being reported.
Actual results may differ from those estimated under different
assumptions and conditions. For the period under review, the most
significant areas of judgment for Corus related to tangible fixed
assets, deferred tax and the value of provisions created in 2000
and 2001 for redundancy, rationalization and other related costs.
There have been no new U.K. standards issued by the Accounting
Standards Board since the last Report & Accounts. However, one
standard, FRS 17 "Retirement Benefits" which was issued in
November 2000 has disclosure requirements which do not need to be
met until accounting periods ending on or after 22 June 2005. The
standard has not been adopted, although the required transitional
disclosure requirements are being made in the Report & Accounts
for 2002. Information on the net pension asset is set out in note
10 of "Supplementary Information" in this release.
On April 18, 2002, Corus launched a revolving-period trade debtor
securitization program in the U.K. Under FRS 5 "Reporting the
substance of transactions" the cash advanced has been offset
against the assigned trade debtors as set out in note 7 of
"Supplementary Information" in this release.
To see financials: http://bankrupt.com/misc/CorusGroup.htm
CONTACT: CORUS GROUP PLC
Anthony Hamilton
Phone: +44 (0)20 7717 4444
Home Page: http://www.corusgroup.com
L. GARDNER: Insinger de Beaufort Is Group's New Adviser
-------------------------------------------------------
As a result of an internal reorganization within the Insinger
Group, the company's nominated adviser has become Insinger de
Beaufort with effect from March 14, 2003.
*****
In January, the group requested that its bankers appoint
administrative receivers to the Group's 5 trading non-aerospace
subsidiaries, namely Sloman Engineering Limited, ADA
Manufacturing Services Limited, Gardner Avon Limited, Gardner
Parts Limited and Bentall Rowlands Limited.
Afterwards it was reported that the London Stock Exchange is
launching a probe into statements made by L Gardner's former
directors. The shareholders, who lodged the complaints,
criticized the directors for overseeing the company's downfall
and at the same time offering to buy the remaining profitable
aerospace operation.
L. GARDNER: Announces Result of Extraordinary General Meeting
-------------------------------------------------------------
L. Gardner Group Plc announces that at the Extraordinary General
Meeting requisitioned by shareholders, held on Thursday March 13,
2003 all of the ordinary resolutions set out in its notice of
Extraordinary General Meeting dated February 19, 2003 were
passed.
The Company also announces that following expiry on March 7, 2003
of the exclusivity agreement entered into with ABN Amro Capital
on February 17, 2003, negotiations continue with ABN Amro Capital
for the acquisition of a number of the Company's subsidiaries,
which together comprise the whole of the Group's aerospace
division. It is hoped that a transaction will be concluded
within the next week, at which time a further announcement will
be made.
Pending conclusion of the negotiations relating to the Group's
aerospace division the Company is unable to publish audited
results for the year to August 31, 2002. Draft figures for the
Group in respect of the year ended August 31, 2002 show a loss on
ordinary activities before taxation (and before exceptional items
and amortization of goodwill) of GBP7,451,000 on a turnover of
GBP85,839,000.
MARCONI PLC: CEO Defines Business and Vision for the Future
-----------------------------------------------------------
Marconi announced that its program to refocus on its core
strengths in the telecommunications equipment and services
marketplace is nearing completion. "While we continually review
the scope and focus of our business against prevailing market
conditions, we have essentially completed the task of structuring
our core business for the future and have made significant
progress in streamlining our business functions accordingly,"
said Mike Parton, the company's chief executive.
Speaking at CeBIT, the international technology and
telecommunications exhibition in Hannover, Germany, Parton added:
"Over the last 18 months, we have identified our core business,
reduced non-core activities radically and aligned our renewed
focus with our strengths.
"I'm delighted to report that, despite the last two years of
turbulence in our industry, Marconi has successfully retained its
key customers, consistently delivered market leading customer
service, and we have continued to bring strategically important
new products to market. We have also appointed a strong, new
Board to oversee our continued evolution. I believe Marconi will
emerge stronger after what has been a difficult period for all of
us in the telecoms industry," said Parton.
Parton also outlined Marconi's vision. "Marconi will continue to
be an efficient and well run company, operating with a high
degree of integrity. We will build on our key strengths of total
reliability, trusted technology and dependable, committed people
who provide excellent customer service. Marconi will be a great
company to work with for our customers, suppliers and employees
and we will be a strong industry partner for other equipment
vendors in the sector," said Parton.
Parton believes that partnerships, where research and development
and routes to market are shared for mutual benefit, will be an
increasingly important factor in the industry and expects Marconi
to be an active participant. "There is no single technology
company today capable of addressing all areas of the operators'
network requirements. Marconi's existing partnerships are very
good examples and we will build on these," he said.
Marconi's future business focus falls into four primary areas:
OPTICAL NETWORKS: This is Marconi's largest product area where it
is a leader in most of its markets, having both incumbency with a
significant number of major carriers, and technology solutions
that offer recognised advantages over competing products. The
business is a leading provider of SDH transmission equipment in
Europe and has a tenable position in many other markets,
including Central and Latin America, as well as the Asia Pacific
region.
Marconi's portfolio gives it a leading position in synchronous
digital hierarchy (SDH) and a strength in European dense
wavelength division multiplexing (DWDM). The company will
continue to build on these strengths with continued investment in
new technology, focusing on cost effective packet-based transport
and efficient presentation of data services to the customer
across existing and new infrastructure in metropolitan and
optical core networks.
The company began the introduction of its range of next
generation SDH equipment (including its SMA Series 4, its MSH2K
and its MSH64C) in the autumn of 2002 and expects to introduce
further new SDH products, including its SMA 16-64 family, during
the current calendar year. Support for private and virtual
private data services will be delivered with integrated
PacketSpan and CellSpan data cards, with the option of ethernet
port extensions for low cost customer delivery.
There are further planned enhancements with full support for
flexible and efficient bandwidth provisioning though
functionality such as Link Capacity Adjustment Scheme (LCAS), and
the adoption of Generic Framing Procedure (GFP) standardised
mapping for a wide range of data services across optical metro
and optical core products.
Enhanced integration in the Metro SDH and Metro WDM products
allows for efficient scalability and delivery of high capacity
services to the customer, and integration of the company's
scalable MSH64c/MSH2K/ES optical core switches and multi-haul
DWDM core products, combined with ASTN control plane evolution,
gives cost-saving automation in the optical core.
BROADBAND ROUTING AND SWITCHING (BBRS): BBRS is focused on
helping public operators evolve from mature, circuit-based
networks to more efficient, packet-based networks. BBRS products
include switch-router platforms that scale from 2.5 to 480 Gbps
for the broadband service delivery and core transport markets,
including VPNs (Virtual Private Networks), DSL aggregation, 3G
aggregation, Internet access and infrastructure, packet-based
voice switches and carrier-managed business services.
At the top end is the new BXR-48000 480 Gbps switch-router, which
supports cell and packet interfaces at the same time on the same
platform critical for the evolution to packet-based networks.
The BXR-48000 provides its 480 Gbps in switching capacity in two
standard equipment racks and recently was augmented by the
world's first commercially available OC-192c (10 Gbps) ATM
(Asynchronous Transfer Mode) interface. Over the last few
quarters, Marconi's BBRS division has announced the first
commercial sales of its new BXR-48000 to customers in both the US
and Europe.
For the IP/ MPLS market, BBRS products address core
infrastructures for IP deployments and multiservice networks,
while simultaneously supporting existing services such as Frame
Relay, ATM and private line data. BBRS products also address the
network edge through MPLS transparent LAN services. BBRS
customers include established relationships with government,
military, and selected public carriers in North America and the
Asian/Pacific market.
BROADBAND SYSTEMS (European Access): This business unit is
focused on leveraging the group's reputation and relationships in
the ETSI region by providing operators with access to networks
and packetised voice technology needed to develop new revenue
streams.
Its market leading software product, SoftSwitch, sold recently to
Jersey Telecom, is already under trial with a number of Marconi's
key customers. SoftSwitch is a carrier-class, software-based
voice over Internet Protocol (VoIP) technology that allows all
communications traffic, including voice, data, e-mail, multimedia
and faxes to be managed intelligently on a single broadband
platform.
Marconi's SoftSwitch allows operators to evolve their traditional
narrowband networks to broadband data networks required for the
distribution of new multimedia services. It also provides the end
user with the benefit of increased, always on' capacity.
SoftSwitch can also enable the use of PC-based software phones
that can follow the end user wherever they are, as well as
enhanced video conferencing and advanced application sharing.
Next Generation Networks: Marconi's Access Hub is rapidly being
deployed as a critical element of a number of operators' network
strategies to enable the roll-out of broadband access services
based on a highly cost effective implementation of digital
subscriber line (xDSL) to end users. The Access Hub may also be
configured to host softswitch Voice Gateways to support voice
over DSL (VoDSL) and high capacity trunk circuits. In conjunction
with the Marconi SoftSwitch and our Routing and Switching
products, we believe we have a truly world class Next Generation
Network solution.
Fixed Wireless: Marconi's Fixed Wireless Access solutions,
developed primarily at Backnang, Germany, are designed to provide
connectivity without physical connections to both fixed line and
mobile operators. Marconi has recently announced the introduction
of its next generation Marconi Digital Multipoint System (MDMS)
solution, designed to offer mobile operators easy and seamless
migration from second or 2.5G to third generation or 3G networks.
SERVICES: This business division is closely aligned to, and
builds from, Marconi's incumbent equipment positions with leading
network operators and corporate customers worldwide and includes
installation, commissioning and maintenance, network planning
(including radio planning services) and managed network services,
such as configuration management and capacity planning.
The division in an active provider of services under a range of
long-term information technology and network services contracts
with a range of non-telecommunications operator customers,
particularly in the transportation and government sectors.
The Services division supports equipment from Marconi and from
other, third party equipment vendors. In total, services accounts
for some 40 percent of Marconi's core revenues.
The company has identified services as a key element in its
future as its customers increasingly opt to outsource services to
specialist third parties like Marconi as an important element in
their efforts to reduce operating expenditure.
About Marconi plc
Marconi plc is a global telecommunications equipment and olutions
company headquartered in London. The company's core business is
the provision of innovative and reliable optical networks,
broadband routing and switching and broadband access technologies
and services. The company's aim is to help fixed and mobile
telecommunications operators worldwide reduce costs and increase
revenues.
The company's customer base includes many of the world's largest
telecommunications operators. The company is listed on the London
Stock Exchange under the symbol MONI.
CONTACT: MARCONI PLC
Joe Kelly, Public Relations
Phone: +44 (0) 207 306 1771
Fax: +44 (0) 7801 722 931
E-mail: joe.kelly@marconi.com
MARCONI PLC: Two New Non-Executive Directors Join Board
-------------------------------------------------------
Marconi announced the agreement of two new non-executive
directors to join the Board of Marconi Corporation plc.
Kathleen Flaherty, a U.S.-based global telecommunications
executive with over twenty years experience in the communications
industry, has agreed to join as a non-executive director of
Marconi Corporation plc. Ian Clubb, with over 25 years experience
in a range of senior financial and management roles, has also
agreed to join the Board of Marconi Corporation plc as a non-
executive director.
Both these appointments will take effect at the time of Marconi
Corporation's forthcoming listing on the London Stock Exchange
following the implementation of the Group's financial
restructuring.
Kathleen Flaherty spent seventeen years with MCI, latterly as
senior vice president, global product architecture and
engineering. Previously (1995-97) she spent two years on
secondment from MCI to BT, during which time she was BT's
marketing director for National Business Communications. Between
1998 and 2001 Kathleen was in Brussels and New York as president
and chief operating officer of Winstar International, a fixed
wireless communications company.
Ian Clubb is chairman of First Choice plc, Shanks Group plc and
Platinum Investment Trust plc. He is also a non-executive
director of oil industry services company, Expro International
plc. He was group finance director at BOC Group plc (1991-1994)
and deputy chief executive and group finance director at British
Satellite Broadcasting Ltd (1989-1991).
These appointments represent significant additions to the
restructuring of the Marconi Board. The Company expects to make
further appointments in due course. Furthermore, when the
forthcoming scheme of arrangement becomes effective, the
financial restructuring will have reached its final stages.
Accordingly, Allen Thomas, a non-executive director who joined
the Board in May 2002 specifically to assist the Company with its
restructuring, will step down from the Boards of Marconi plc and
Marconi Corporation with immediate effect.
John Devaney, chairman of Marconi plc, said: 'I am delighted to
welcome Kathleen Flaherty and Ian Clubb to the Board. Kathleen's
international telecommunications experience and Ian's broad base
of experience in senior management, will be great assets to the
Company as we emerge and rebuild from our financial
restructuring.
'Allen's restructuring experience enabled him to make a
considerable contribution to helping the company through its
financial restructuring. As we reach the final stages of that
process, Allen has decided that it is appropriate for him to step
down from the Board at this time.
'We wish Allen well and thank him for his contribution in his
time on the Board of Marconi.'
The Board of Marconi Corporation plc after the forthcoming
restructuring will now comprise:
Chairman: John Devaney
Executive Directors: Mike Parton, Chief Executive Officer; Mike
Donovan, Chief Operating Officer; Chris Holden, Chief Financial
Officer (Interim)
Non-Executive Directors: Kent Atkinson, Chairman of Audit
Committee; Ian Clubb, Chairman of Remuneration Committee;
Kathleen Flaherty, Werner Koepf.
MYTRAVEL GROUP: Struggles to Find Buyer for Cresta
--------------------------------------------------
The U.K.'s second-largest holiday company, MyTravel Group PLC, is
having problems finding a buyer for short-breaks business Cresta,
say unnamed sources of the Sunday Times.
It is understood that talks with potential buyers have all failed
due to disagreements over the transaction price, with MyTravel
directors seeking GBP40 million for the Cresta brand. The
looming war in Iraq had also dampened interest in the business.
Potential buyers of the brand includes Hg Capital, 3i,
Lastminute.com PLC and First Choice holidays PLC.
MyTravel, formerly Airtours, is selling non-core businesses after
issuing profit warnings due to the slump in holiday bookings and
a series of financing gaps. The company has hired Deutsche Bank
to advise it on the sale of the GBP40-million (US$65 million)
business.
The tour operator has also recently sold the entire share capital
of Sunway Travel Limited to Broomco.
It refused to comment on suggestions that Cresta had been
withdrawn from sale.
The sale was reportedly an important part of a strategic review
of the company being carried out by a new management team led by
chief executive Peter McHugh.
CONTACT: MYTRAVEL GROUP PLC
Parkway One, Parkway Business Centre, 300 Princess Rd.
Manchester M14 7QU, United Kingdom
Phone: +44-1-61 23-20-066
Fax: +44-1-61 23-26-524
Home Page: http://www.airtours.com
DEUTSCHE BANK AG
Investor Relations
31 West 52nd Street
29th Floor
New York, NY 10019-6160
USA
Phone: +1-212-469-8000 (Switchboard)
Phone: +1-212-469-7125 (Investor Relations)
Fax: +1-212-469-7322
E-mail: db.ir@db.com
PIZZAEXPRESS: Investors Call for Resignation of Chairman
--------------------------------------------------------
PizzaExpress shareholders who were angered by the move of the
company's directors to recommend a GBP263 million offer for the
business called for the resignation of PizzaExpress chairman
Nigel Colne.
Jeremy Utton from Analyst Investment Management, which has about
3% holdings in the company, wrote a letter to the board's chief
executive, David Page, calling for "urgent action", including the
appointment of a new chairman to replace Mr. Colne.
Shareholders, representing more than 20% of the stock wanted to
scrap the recommendation of the independent directors for a 367p-
per share offer from Luke Johnson, the group's former chairman.
Mr. Utton is requesting Mr. Page for an extraordinary general
meeting to discuss their proposals, although it was unclear
whether Mr. Page had the right to grant so, a source close to the
group said.
Mr. Utton is proposing for a share buyback program, according to
The Independent. Yet, in consideration, under takeover rules, a
company in an offer period cannot repurchase its stock in the
market.
Mr. Page declined to comment, the report says.
PizzaExpress, which admitted having tough trading following a
slump in tourism and downturn in the economy, posted a year of
dwindling sales and falling share value.
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
ROYAL & SUNALLIANCE: Fitch Ratings Withdraws 3 USA Ratings
-----------------------------------------------------------
Fitch Ratings has withdrawn the ratings of three Royal &
SunAlliance USA insurance subsidiaries that were merged into an
affiliate. Employee Benefits Insurance Company, Design
Professional Insurance Company and EBI Indemnity Company were
merged into Security Insurance Company of Hartford. Fitch
currently rates Security Insurance Company of Hartford 'BBB+'.
The ratings affected are listed in the table below.
Entity/Issue/Type Action Rating
Design Professional Ins. Co. EBI Indemnity Company Employee
Benefits Ins. Co. --Insurer financial strength rating Withdraw
'BBB+'
CONTACT: FITCH RATINGS
Donald F. Thorpe, CPA, CFA
Phone: 1-312-606-2353
or
Brian C. Schneider, CPA
Phone: 1-312-606-2321, Chicago
***********
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.
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