/raid1/www/Hosts/bankrupt/TCREUR_Public/030403.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, April 3, 2003, Vol. 4, No. 66
Headlines
* C Z E C H R E P U B L I C *
UNION BANKA: Clients May Redeem Deposits at GE Capital Bank
* F I N L A N D *
BENEFON OYJ: Announces Withdrawal of NRJI From Commitment
FINNAIR OYJ: Expects Negative Operational Result in 2003
* F R A N C E *
ALSTOM: Clears Issue Regarding Offer From Mysterious Investor
VIVENDI UNIVERSAL: Closes VUE Securitization Transaction
RHODIA S.A.: S&P Cuts Ratings to Non-Investment Grade
SCOR GROUP: Stock Market Crisis Leads to EUR455 MM Loss in 2002
SCOR GROUP: To Propose Changes in Board Structure in Meeting
SCOR GROUP: Pierre Charles Is Appointed Chief Claims Strategist
* G E R M A N Y *
BAYER AG: Establishes Joint Venture With Bufa Beteiligungen
DIALOG SEMICONDUCTOR: Intends to Close Swedish Subsidiary
GERLING-KONZERN: May Sell Reinsurance Group, Says Court
HVB REAL: Moody's Downgrades Financial Strength Rating to 'D'
WESTHYP: Moody's Downgrades Financial Strength to 'D'
WUERTTHYP: Moody's Confirms Financial Strength Rating at C+
* I R E L A N D *
ELAN CORP: Receives USD89.5MM Payment From Investments in Xcel
HVB IRELAND: Moody's Upgrades Financial Strength Rating to 'C'
FIAT SPA: Fimeccanica Wants to Bid With U.S. Private Equity Group
TELECOM ITALIA: Board of Seat Approves Spinoff Project
* L U X E M B O U R G *
METROMEDIA INTERNATIONAL: Announces Important Company Decisions
VINTAGE CAPITAL: Fitch Affirms 'CCC' Ratings of Class C Notes
* N E T H E R L A N D S *
GETRONICS: Standard & Poor's Raises Credit Rating
KLM ROYAL: Takes Further Measures in Lieu of Current Events
* N O R W A Y *
NORSKE SKOG: Terminates Norske Skog Klabin Joint Venture
* P O L A N D *
BANK GOSPODARKI: Ministry Considers Merger With PKO BP
NETIA HOLDINGS: Subsidiary Ends Agreement With Consultant
NETIA HOLDINGS: Terminates Contracts With Board Members
* S W I T Z E R L A N D *
MOVENPICK GROUP: Completes Sale of Ice Cream Brands to Nestle
* U N I T E D K I N G D O M *
AORTECH INTERNATIONAL: To End Investment in Polymer Heart Valve
AORTECH INTERNATIONAL: Closure in Scotland to Cut 30 Jobs
AQUILA INC.: Moody's Downgrades Ratings on Cash Concerns
CABLE & WIRELESS: Announces Release of Funds From Escrow
CABLE & WIRELESS: Announces Disposals in Continental Europe
CABLE & WIRELESS: Tax Settlement Subject to Criticisms of MPs
CORUS GROUP: Negotiates Takeover of Steel Assets With LNM
PIZZAEXPRESS: Venice Bidder Clears Issue Regarding Offer
ROYAL MAIL: Rise for Basic Postage Effective Starting May 8
ROOM SERVICE: Strikes Deal With Creditors, Resumes Trading
ROOM SERVICE: Appoints John East & Partners as Adviser
THISTLE HOTELS: BIL Clarifies Position Regarding Cash Offer
===========================
C Z E C H R E P U B L I C
============================
UNION BANKA: Clients May Redeem Deposits at GE Capital Bank
-----------------------------------------------------------
Redemption of insured deposits in bankrupt Union Banka will be
done through GE Capital Bank, according to the Prague Business
Journal.
Depositors of bankrupt Union Banka may demand the return of 90%
of deposits, up to a maximum of EUR25,000 (CZK790,000), starting
mid-May, according to GECB spokesman Jan Hainz.
Earlier, Deposit Insurance Fund (FPV) head Josef Tauber revealed
that the first 60% of clients should receive the money in the
first month, 30% in the second and the rest in the third month
after the start of payments. Clients may claim the compensations
within 5 years, according to the report.
UB's license was earlier revoked on grounds that its proposed
rescue plan to guarantee a renewal of the bank's payment
capacities is unrealistic.
Invesmart, the majority shareholder of Union Banka, has made
plans to appeal the removal of the bank's license.
CONTACT: UNION BANKA
ul. 30 dubna c. 35
70200 Ostrava
Phone: 596108111
Fax: 596120134
Home Page: http://www.union.cz
E-mail: union@union.cz
GE CAPITAL BANK
Park Alle 295
2605 Brondby
Phone: 43 29 50 00
Fax: 43 29 50 01
Home Page: http://www.ge-laan.dk/
=============
F I N L A N D
=============
BENEFON OYJ: Announces Withdrawal of NRJI From Commitment
---------------------------------------------------------
NRJ International, who have made subscription commitments for a
total of EUR10.38 million in the on-going equity issue decided by
Benefon's extraordinary shareholders' meeting of March 28, 2003,
have, according to information received, decided to withdraw from
their subscription commitments.
Due to the withdrawal, Dr. Philippe Frangie who, as reported
earlier, has made a EUR12 million subscription commitment is thus
becoming the main investor in this directed share issue of
Benefon. In addition, the company has received from its creditors
subscription commitments for about EUR2,6 milion which raises the
total amount of received subscription commitments to about
EUR14,6 million. As decided by the shareholders' meeting, the
subscription period ends on April 4, 2003.
FINNAIR OYJ: Expects Negative Operational Result in 2003
--------------------------------------------------------
Finnair launched a 160 million euro cost-cutting program for
2003-2004 a week ago, the goal of which is to achieve permanent
changes in cost and operating structures. The reasons are the
structural and permanent decrease in price levels as well as a
significant drop in demand.
A 60 million euro cut is targeted at personnel expenses which
represents a 1200 reduction in manpower in the Group. Finnair
began negotiations with personnel groups in accordance with the
Act on Co-operation within Undertakings on Monday. Short-term
savings will be sought with maximum six-week lay-offs. The aim is
to implement the lay-offs as quickly and widely as possible
without significantly cutting the level of operations. The lay-
offs will begin earliest in May.
The total effect of the cost cuts on the result will be felt
starting 2005.
The Finnair Oyj operational result for the current financial year
is expected to be negative.
CONTACT: FINNAIR OYJ
Petri Pentti, Chief Financial Officer
Phone: +358 9 818 4950
Taneli Hassinen, Financial Communications Officer
Phone: +358 9 818 4976.
===========
F R A N C E
===========
ALSTOM: Clears Issue Regarding Offer From Mysterious Investor
-------------------------------------------------------------
The daily French newspaper La Tribune quoted today a piece of
information dated March 31 from the efinancialnews web site,
describing a supposed bid made on ALSTOM by a mysterious private
Dutch investor, for 2 euros per share.
ALSTOM confirms having received a letter from a company named MJ
Global Acquisition, communicating its wish to acquire the whole
ALSTOM capital and whose seriousness appeared doubtful.
ALSTOM asked its advisers to investigate but, for the time being,
this company, which is totally unknown from the financial
community, has not been clearly identified.
ALSTOM therefore counsels extreme prudence to its shareholders.
*****
Alstom is currently disposing assets to offset an expected EUR1.3
billion loss in the year to March 2003. Included in its EUR3
billion asset disposal program are its power, transmission and
distribution division as well as its industrial turbines
business.
Last month, Alstom pre-announced a EUR1.3 billion net loss for
2002, along with an admission that Alstom would not achieve
financial targets set out in its March 2002 "Restore Value"
restructuring plans.
CONTACT: ALSTOM
Investor relations
E. Rocolle-Teyssier
Phone: +33 1 47 55 25 78
E-mail: investor.relations@chq.alstom.com
VIVENDI UNIVERSAL: Closes VUE Securitization Transaction
--------------------------------------------------------
As the first stage in the financial restructuring announced on
March 24, 2003, Vivendi Universal confirmed that its subsidiary
Vivendi Universal Entertainment (VUE) has successfully closed a
$700 million securitization transaction.
The securitization transaction is based on future video
(including DVD and VHS) and television revenues in the United
States from part of Universal's film library.
The five-year transaction (average duration) is part of the
program to refinance VUE's $1.62 billion bridge loan.
*****
In March, Standard & Poor's assigned its 'B+' long-term senior
unsecured debt rating to French media giant Vivendi Universal's
(VU) planned high-yield bond issue.
The rating on the high-yield bond reflects the issue's
subordination to VU's credit lines, which include the $1.62
billion bridge loan of VU's entertainment subsidiary, VUE.
At that time, Milan-based Standard & Poor's credit analyst Guy
Deslondes said, "We believe that the planned refinancing--when
completed--will significantly improve VU's tight liquidity, which
has been the group's primary credit risk over the past year."
RHODIA S.A.: S&P Cuts Ratings to Non-Investment Grade
-----------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
long- and short-term corporate credit ratings on the France-based
specialty-chemicals manufacturer Rhodia S.A. to 'BB+' and 'B'
from 'BBB-' and 'A-3', respectively. The outlook is stable.
At the same time, the group's senior unsecured debt rating was
lowered to 'BB', one notch below the corporate credit rating,
owing to structural subordination.
The downgrade reflects Rhodia's still weak financial measures.
The ratings continue to factor in the group's diversified
business profile, underpinned by its leading positions and status
as one of the largest specialty-chemicals concerns in the world.
Rhodia has, nevertheless, shown much lower resilience than
expected to the chemical industry's softening market conditions
during the past few years, and the group's operating margin is
substantially lower than those of its peers. Although Rhodia's
financial profile was substantially strengthened in 2002, it
remains extremely weak and maintaining investment-grade status
would have required further substantial improvement in 2003.
"We believe that such improvement is unrealistic, given the bleak
market conditions," said Standard & Poor's credit analyst Nicolas
Baudouin.
"However, Standard & Poor's expects most of Rhodia's financial
measures to continue to improve, with a slight decrease in
indebtedness in 2003 and more significant steps toward
deleveraging in 2004."
The current ratings take into consideration Standard & Poor's
belief that Rhodia's extraordinary outlays in 2002 will not
recur. They also anticipate a reduction of capital expenditures
to below EUR300 million and the implementation of additional
divestitures.
SCOR GROUP: Stock Market Crisis Leads to EUR455 MM Loss in 2002
---------------------------------------------------------------
-- Premium income: EUR 5,016 million (+2.6%)
-- Group net loss: EUR -455 million
-- Life reinsurance Embedded Value after tax at December 31, 2002
EUR 578 million
Despite unusually difficult operating conditions, toward the end
of the year SCOR charted a course for recovery and began to
implement appropriate measures.
Premium income in 2002 totaled EUR 5,016 million, a rise of 2.6%.
At constant exchange rates, the increase would have been +13%.
The Group's net loss of EUR - 455 million reflects the impact of
the stock market crisis and additions to prior-year reserves.
SCOR Group has signed on March 28, 2003 a letter of intent for
the disposal of Commercial Risk Partners.
B&W Deloitte has appraised SCOR's life division's Embedded Value.
Embedded Value after tax increased by EUR 120 million to EUR 578
million at December 31, 2002.
The Board of Directors of SCOR met on March 31, 2002, with Denis
Kessler in the Chair, to close the financial statements for
fiscal 2002.
(i) 2002 results
The Group registered a net loss of EUR 455 million for 2002.
The loss for the first three quarters amounted to EUR 425
million.
At the time of announcement of the "Back on Track" plan it was
estimated that SCOR would report a full-year 2002 loss of EUR 400
million.
The following factors account for the difference between the loss
at the end of the first three quarters (EUR -425 million) and the
final loss of EUR -455 million for full-year 2002:
-- the write-down in full (EUR 18 millions) of goodwill on the
Bermuda subsidiary Commercial Risk Partners (CRP), the addition
of EUR 51 million to CRP's reserves prior to its disposal,
-- a positive Group net income of EUR 39 million (excluding the
goodwill write-off on CRP and excluding replenishment of CRP's
reserves) for the fourth quarter of 2002.
Fourth quarter 2002 results (excluding CRP) exceeded the forecast
made in November 2002 by EUR 14 million. It was decided in
January 2003 to dispose of CRP or transfer it to a run off
account. A letter of intent providing for the disposal of CRP was
signed on March 28, 2003. CRP is disposed of at its net book
value at December 31, 2002, coupled with a clause providing for
the share-out between the purchaser and SCOR of any improvement
or deterioration in reserves up to a ceiling of EUR 100 million,
to be assessed in 2007 and in 2009. Closure of the transaction is
scheduled to take place by June 30, 2003.
(ii) Review of operations in 2002
Premium income rose by +2.6% in 2002 to EUR 5,016 million. The
increase in premium income, at constant exchange rates, would
have been + 13%.
Property and Casualty (P&C) reinsurance writings increased by 7%
(17% at constant exchange rates) to EUR 2,069 million. Rate
increases, especially in short to medium-tail classes, helped to
lift Group premium income in this sector. The share of short to
medium-tail writings increased in 2002, representing 48% of total
activity in 2002, against 41% in 2001. P&C reinsurance began to
pick up in 2002, with a technical operating loss of EUR -271
million, compared with EUR -440 million in 2001.
Life and accident reinsurance held steady in 2002. Premium income
rose 2% (10% at constant exchange rates) to EUR 1,530 million.
This sector registered a technical operating profit of EUR 26
million despite falling investment income.
Large Corporate Accounts business rose 56% (75% at constant
exchange rates) to EUR 874 million. Rates increased
substantially. The technical operating loss of EUR -4 million in
2002 represented a very marked improvement relative to the 2001
loss of EUR -216 million.
Credit and bond activity was down 33% relative to the previous
year, to EUR 117 million. This line of business registered a
technical operating loss of EUR -111 million in 2002 due to
losses on the credit derivatives portfolio. The Group has
withdrawn from the latter activity entirely since November 2001.
Premium income on Alternative Risk Transfer (ART) reinsurance
written by CRP fell by 41% in 2002 to EUR 426 million. The
technical operating result fell to a negative EUR 172 million in
2002, compared with a profit of EUR 4 million in 2001.
(iii) Group key figures
Consolidated key figures
In EUR millions 31/12/01 31/12/02 Change
Gross written premiums 4,890 5,016 +2.6%
Group net income -278 -455 not material.
Net technical reserves 10,438 10,381 not material.
Investments (market to market) 9,606 9,717 +1.2%
Group shareholders' equity 1,318 1,070 -18.8%
Group shareholders' equity,
fully-diluted 1,369 1,289 -5.8%
The combined ratios (measuring coverage of losses and expenses by
premiums) in each Group line of business, based on accounting
data for the year (all underwriting years combined), work out to:
Combined ratios (net of retrocessions) 31/12/01 31/12/02
P&C 131.70% 117.68%
Life and accident 108.30% 105.27%
Large Corporate Accounts 190.61% 105.92%
Credit and Bond 104.12% 181.22%
Alternative Risk Transfer (CRP) 111.28% 147.95%
Total 123.85% 118.30%
Combined ratios have improved, particularly in P&C reinsurance
and Large Corporate Accounts.
(iv) Review of investment policy in 2002
The outstanding features of 2002 were the continuing equity
markets slide and falling interest rates on bonds. SCOR Group
registered a decline in investment income in 2002, while capital
gains on bonds increased. At the same time, operating cash flow
rose, debt was reduced, and shareholders' equity increased.
-- total investment income fell by 28%, from EUR 450 million in
2001 to EUR 326 million in 2002. Losses from disposals of equity
securities, net of recoveries from allowances for long-lived
impairment, amounted to EUR 250 million in 2002. In addition, the
Group realized a capital gain of EUR 89 million on the disposal
of its equity interest in COFACE.
-- aggregate unrealized capital gains at December 31, 2002
totaled EUR 303 million, versus EUR 66 million at end-2001. The
equity portfolio at December 31, 2002 registered a loss of EUR 31
million, the bond portfolio a capital gain of EUR 222 million,
while capital gains on real estate amounted to EUR 112 million.
-- investments (marked to market) amounted to EUR 9,717 million
at December 31, 2002, a rise of 1.2% (7.7% at constant exchange
rates). These were split between bonds (64.5%), cash and
equivalents (20%), cash deposits (8%), real estate (5%), and
equity securities (2.5%).
-- operating cash flow increased sharply, from EUR 10 million in
2001 to EUR 345 million in 2002. The capital increase also
contributed to the increase in cash holdings. Aggregate Group
cash and equivalent totaled EUR 1,788 million at the end of 2002,
while free cash-unencumbered and excluding trust funds-amounted
to EUR 1,436 million.
Group debt has been reduced from EUR 1,030 million at December
31, 2001 to EUR 892 million at end-2002. The debt maturity
profile has been lengthened as commercial paper and negotiable
medium-term notes outstanding declined from EUR 366 million at
end-2001 to EUR 62 million at end-2002.
-- long-term capital (fully-diluted shareholders' equity plus
quasi-equity and long-term borrowings) rose from EUR 2,085
million at end-2001 to EUR 2,183 million at end-2002.
(v) Life reinsurance Embedded Value at December 31, 2002
Embedded value at December 31, 2002, in the Group's life
reinsurance division (responsible for life, accident and health
reinsurance), has been appraised by B&W Deloitte.
Life reinsurance Embedded Value before tax increased from EUR 622
million at December 31, 2002 to EUR 750 at the end of 2002, at
constant method and perimeter. Embedded value after tax increased
from EUR 458 million at end-2001 to EUR 578 million at the end of
2002. It thus increased by EUR 120 million in 2002.
Inclusion of Embedded Value items not recognized in the
consolidated balance sheet would increase the value of SCOR's
consolidated net assets from EUR 1,070 million to EUR 1,299
million.
These figures, combined with the division's positive results in
2002, reflect the quality of SCOR's life business and its
positive contribution to the value of the SCOR Group.
(vi) Outlook
As called for in the "Back on Track" plan, the Group has
strengthened its control systems at all echelons. A new Board of
Directors will be elected by the General Meeting of Shareholders
on May 15, 2003. The management team has been renewed and
strengthened. The new control systems are now in place, a Chief
Reserving Actuary and a Head of Internal Audit having been named
in January, while a Chief Claims Strategist was appointed in
March. The internal underwriting planning and monitoring
procedures will be reviewed between now and the end of April
2003.
Respecting the "Back on Track" plan, the 2003 renewals campaign
may be considered satisfactory. The Group is deliberately
restricting its writings, selecting its risks, and rigorously
applying its underwriting ratios. It is benefiting from rate
increases in all its business segments. It is re-balancing its
portfolio toward Europe, short-tail risks, and life and accident
reinsurance.
At the end of the Board meeting, Denis Kessler, Chairman and
Chief Executive Officer, stated:
"The year 2002 was an exceptionally tough one for the SCOR Group,
culminating in a loss of EUR 455 million. We have had to make
hefty additional reserves on prior years to meet long-tail
claims. The sharp fall in the stock markets has affected the
Group. SCOR responded with the adoption of its "Back on Track"
recovery plan in November 2002, designed to restore confidence,
increase its solvency and recover its profitability. SCOR Group
ought to be in a position to start profiting in 2003 both from
improving prices in the reinsurance market and from the results
of recovery measures already implemented, thanks to a combination
of the Group's recapitalization, the adoption of a rigorous
underwriting plan implemented from the start of the renewals, a
very conservative investment policy, a radical reorganization
from top to bottom, which has left the Group free to refocus on
its profitable businesses."
Financial disclosure timetable
Annual Shareholders' Meeting: May 15, 2003
1st quarter 2003 results: May 16, 2003
SCOR GROUP: To Propose Changes in Board Structure in Meeting
------------------------------------------------------------
At its meeting on March 31, 2003, the SCOR Board of Directors
decided to propose to the General Meeting of Shareholders on May
15, changes in the membership, as recommended by Allan Chapin, a
non-executive director, in January.
The new Board would be made up as follows:
Denis Kessler, Chairman and Chief Executive Officer, SCOR,
Daniel Lebegue, former Chief Executive, Caisse des Depots et
Consignations,
Andre Levy-Lang, former Chairman, Paribas,
Claude Tendil, Chairman and Chief Executive Officer, Generali
France,
Jean-Claude Seys, Chairman and Chief Executive Officer, MAAF, Les
Mutuelles du Mans, and COVEA,
Yvon Lamontagne, Canadian, non-executive director of several
companies, including Hydro Quebec, etc., former Chairman, Boreal
Assurance,
Carlo Acutis, Italia, Vice-Chairman, La Vittoria Assicurazioni,
former Chairman of the Comit, europ,en des Assurances (European
Federation of National Insurance Associations),
Herbert Schimetscheck, Austrian, Chairman of the Management
Board, Uniqa International, and former Chaiman of the Comit,
Europ,en des Assurances
Jean Baligand, Chairman, Groupama,
Daniel Havis, Chairman and Chief Executive, officer, MATMUT,
Jean Simonnet, Chairman, MACIF,
Allan Chapin, Partner, Compass Partners investment fund,
Daniel Valot, Chairman of the Management Board, Technip-Coflexip
Antonio Borges, Portuguese, Vice-Chairman and Managing Director,
Goldman Sachs International
A staff representative
In addition, two non-voting directors are expected to be named:
Georges Chodron de Courcel, Member of the Executive Committee,
BNP-Paribas,
Helman Le Pas de Secheval, Chief Financial Officer, Groupama.
As recommended in the evaluation carried out in January, the new
Board will comprise:
-- a majority of non-executive directors on the Board. The Board
considers that Messrs. Lebegue, Levy-Lang, Tendil, Havis,
Simonet, Lamontagne, Acutis, Schimetscheck, Borges and Chapin
satisfy this criterion. The Board based its evaluation on the
criteria proposed by the Bouton Report in France and the
recommendations of the NYSE in the United States;
-- a greater diversity of expertise. In addition to experts drawn
from the insurance and reinsurance sector, the Board will have
more members representing the world of finance and industry,
-- a more international perspective, with directors from Italy,
Portugal, Austria, Canada and the United States, and directors
with wide international experience.
The new Board will meet on May 15, after its membership has been
confirmed by the General Meeting of Shareholders.
SCOR GROUP: Pierre Charles Is Appointed Chief Claims Strategist
---------------------------------------------------------------
Pierre CHARLES has joined SCOR in the newly-created post of Chief
Claims Strategist
Pierre CHARLES, 56, is a graduate of the ENSEM School of
Engineering and holds a Master of Science (California Institute
of Technology, USA) and an MBA from INSEAD. He joined AIG Europe
in 1989, where he was in charge of European operations, later
becoming Head of Strategy and Development.
After starting his career in industry, with Procter&Gamble, he
moved to McKinsey in 1974, before entering the insurance industry
in 1976, where he successively held the posts of Deputy Manager
in the International Division and later Director of Consumer
Lines Risks Division at GAN. In 1986, he became Senior Vice
President, Allianz Group, with responsibility for management
control, reinsurance and personal lines. He headed the merger of
Soci,t,s La Protectrice (RAS Italy) with Allianz France.
Pierre CHARLES will have full control of large claims in all
classes of business.
He will be also in charge of implementation of a global claims
management policy for all SCOR entities.
The creation of this function is part of a series of actions
comprised in the "Back on Track" plan launched by SCOR in
November 2002, aimed at reinforcing control over underwriting
quality and improving management.
=============
G E R M A N Y
=============
BAYER AG: Establishes Joint Venture With Bufa Beteiligungen
-----------------------------------------------------------
Bayer AG and Bufa Beteiligungen GmbH & Co. KG have set up a new
systems house known as Bufa Polyurethane GmbH & Co. KG, in short
Bufa PUR. The joint venture, in which each partner has a 50
percent interest, has its headquarters in Oldenburg, Germany and
employs ca. 50 people. In 2002 the previous business unit
polyurethanes of Bufa posted sales of around EUR 20 million. Dr.
Wilhelm Lamberts (46) and Dirk Buschmann (64) will head the joint
venture.
Bayer Polymers, a subgroup of Bayer AG, already has systems
houses in key regions of Europe. In addition to Betapur in Spain,
Deltapur in Italy and Tectrade in Denmark also Bufa PUR in
Germany is now in charge of Bayer Polymers. Systems houses offer
ready-for-use polyurethane raw materials systems for special
applications. A local presence makes it possible to supply
customers more quickly with the products they need. Greater
closeness to customers also comes about through working out
solutions to specific problems together.
Polyurethanes are specialty plastics that are employed in an
enormous range of applications. They are used, for example, in
the manufacture of mattresses, upholstered furniture and car
seats as well as in shoe soles, office furniture, steering
wheels, roof insulation and appliance housings.
DIALOG SEMICONDUCTOR: Intends to Close Swedish Subsidiary
---------------------------------------------------------
Dialog Semiconductor Plc reported that it was planning to close
its Swedish subsidiary. The decision has been made due to take
measures to control both costs and headcount in order to better
ensure the company's long-term future.
Dialog has decided to focus on its core competence, which is the
design and manufacture of integrated circuits. At present its
Swedish facility has a large number of employees and closing it
would give the greatest reduction on cost with the least impact
on Dialog's core business.
Information about Dialog Semiconductor
Dialog Semiconductor develops and supplies mixed signal component
and system level solutions for wireless communications,
automotive and industrial applications.
Dialog's innovative products developed in 100% CMOS are used by
major OEMs (original equipment manufacturers) across the world.
The company focuses on standard product and high volume
applications where it can exploit its mixed signal expertise, IP
design library and effective execution from specification to
delivery.
The company is headquartered near Stuttgart, Germany with
additional design facilities in the UK, the USA, Austria and
Japan. Dialog Semiconductor Plc is listed on the Frankfurt, on
the NASDAQ (DLGS) and NASDAQ Europe (DLGS) exchanges and included
in the Nemax50 since December 27, 2001. As of January 1, 2003
Dialog Semiconductor was admitted to the Prime Standard segment
of the Frankfurt Stock Exchange.
CONTACT: DIALOG SEMICONDUCTOR
Birgit Hummel
Neue Strabe 95
D-73230 Kirchheim/Teck - Nabern
Phone: +49-7021-805-412
Fax: +49-7021-805-200
E-mail: birgit.hummel@diasemi.com
Home Page: http://www.dialog-semiconductor.com
GERLING-KONZERN: May Sell Reinsurance Group, Says Court
-------------------------------------------------------
The administrative court in Frankfurt a.M. ruled by summary
proceedings, that the objection which the German supervisory
authority BaFin lodged against the sale of the Gerling
Reinsurance Group to Globale Management GmbH is unlawful as there
is no legal basis to warrant this prohibiting order.
The Gerling Group believes that this decision in its favor will
have a signaling effect for foreign supervisory bodies as well.
"The deconsolidation of the Reinsurance Group now beginning to
take shape will give the Gerling Group more freedom of action and
greater planning safety", says Bjorn Jansli, Executive Board
chairman of the Gerling holding company.
*****
It can be recalled that BaFin rejected the sale of the
reinsurance division to Globale Management GmbH over fears
Globale would not be able to keep the company afloat.
Upon reviewing the case, roused by Gerling's appeal, however, the
administrative court ruled that BaFin had overstepped its
boundaries since it lacked the power to block such purchases.
A BaFin spokesman commented: "We'll review the decision before
determining whether to appeal."
Gerling's reinsurance unit is the world's sixth-largest
reinsurer. Since it posted a loss of EUR582.5 million (USD634.8
million) in 2001, minority partner Deutsche Bank AG has looked
for an exit, with a sale of the troubled reinsurance division
seen as crucial to a sale of the remainder of Gerling's insurance
activities.
HVB REAL: Moody's Downgrades Financial Strength Rating to 'D'
-------------------------------------------------------------
Moody's Investors Service downgraded HVB Real Estate's financial
strength ratings from C+ to D following HVB's announcement of
certain reorganizations in its subsidiaries.
HVB is planning to transfer its main activities in commercial
real estate financing to the new Hypo Real Estate Group--
including the entire European Real Estate Finance business.
The move will involve its three mortgage subsidiaries, WurttHyp,
HVB Real Estate Bank and WestHyp, which are being contemplated
for spin-off in the autumn of 2003.
WestHyp will become a subsidiary of Hypo Real Estate Bank, the
new name for HVB Real Estate, and afterwards will be merged to
it.
Hypo Real Estate Holding will be the new management holding
company for the real estate group.
According to the rating agency, HVB Group shareholders will
receive an additional share of the holding for four HVB-shares
and will vote on the spin-off at the Annual General Meeting on
May 14 this year.
The new Hypo Real Estate Bank is expected to become the biggest
bank in the new Hypo Real Estate Group with the largest
commercial real estate portfolio.
But it is in the rating agency's opinion that the combination of
both banks will remain structurally affected by HVB Real Estate's
work-out activities, which includes reduction of exposure to the
difficult German commercial real estate market.
While recognizing HVB Real Estate's progress in improving its
risk management and provisioning levels, Moody's warns of
difficulties in reducing potential impact of the legacy risks in
the loan portfolio on the bank's capital. It further notes the
possibility that the effort may need the announced EUR590 million
risk sheltering provided by HVB.
Hypo Real Estate International's funding will remain supported on
a limited basis for some time by HVB, according to the rating
agency.
Improving the company's profitability in the German market, is
another challenge that the rating agency anticipates.
Moody's downgraded the deposit and debt ratings of HVB Real
Estate to Baa1/P-2 from A1/P-1, expecting that the transactions
will go through.
The ratings of HVB Real Estate's mortgage Pfandbriefe have been
downgraded to A1 from Aa1.
The outlook on all long- and short-term debt and deposit ratings
and FSRs is stable.
WESTHYP: Moody's Downgrades Financial Strength to 'D'
-----------------------------------------------------
Moody's Investors Service downgraded Westfaelische
Hypothekenbank's (WestHyp's) financial strength ratings from C to
D following HVB's announcement of certain reorganizations in its
subsidiaries.
HVB is planning to transfer its main activities in commercial
real estate financing to the new Hypo Real Estate Group--
including the entire European Real Estate Finance business.
The will involve its three mortgage sudsidiaries, WurttHyp, HVB
Real Estate Bank and WestHyp, which are being contemplated for
spin-off in the autumn of 2003.
WestHyp will become a subsidiary of Hypo Real Estate Bank, the
new name for HVB Real Estate, and afterwards will be merged with
it.
Hypo Real Estate Holding will be the new management holding
company for the real estate group.
According to the rating agency, HVB Group shareholders will
receive an additional share of the holding for four HVB-shares
and will vote on the spin-off at the Annual General Meeting on
May 14 this year.
The new Hypo Real Estate Bank is expected to become the biggest
bank in the new Hypo Real Estate Group with the largest
commercial real estate portfolio.
But it is in the rating agency's opinion that the combination of
both banks will remain structurally affected by HVB Real Estate's
work-out activities, which includes reduction of exposure to the
difficult German commercial real estate market.
Moody's downgraded the deposit and debt ratings of WestHyp
WestHyp) to Baa1/P-2 from A2/P-1, expecting that the transactions
will go through.
The rating WestHyp's mortgage Pfandbriefe have been downgraded to
A1 from and Aa2.
The outlook on all long- and short-term debt and deposit ratings
and FSRs is stable.
WUERTTHYP: Moody's Confirms Financial Strength Rating at C+
-----------------------------------------------------------
Moody's Investors Service downgraded the deposit and debt ratings
of Wuerttembergische Hypothekenbank (WuerttHyp) to A3/P-2 from
A2/P-1 and confirmed the bank's Financial Strength Rating at C+
following HVB's announcement of certain reorganizations in its
subsidiaries.
HVB is planning to transfer its main activities in commercial
real estate financing to the new Hypo Real Estate Group--
including the entire European Real Estate Finance business.
The move will involve its three mortgage subsidiaries, WurttHyp,
HVB Real Estate Bank and WestHyp, which are being contemplated
for spin-off in the autumn of 2003.
WestHyp will become a subsidiary of Hypo Real Estate Bank, the
new name for HVB Real Estate, and then the banks will be merged.
WuerttHyp will be the second future subsidiary of Hypo Real
Estate Holding, the new management holding company for the real
estate group.
According to the rating agency, HVB Group shareholders will
receive an additional share of the holding for four HVB-shares
and will vote on the spin-off at the Annual General Meeting on
May 14 this year.
The new Hypo Real Estate Bank is expected to become the biggest
bank in the new Hypo Real Estate Group with the largest
commercial real estate portfolio.
But it is in the rating agency's opinion that the combination of
both banks will remain structurally affected by HVB Real Estate's
work-out activities, which includes reduction of exposure to the
difficult German commercial real estate market.
While recognizing HVB Real Estate's progress in improving its
risk management and provisioning levels, Moody's warns of
difficulties in reducing potential impact of the legacy risks in
the loan portfolio on the bank's capital. It further notes the
possibility that the effort may need the announced EUR590 million
risk sheltering provided by HVB.
Hypo Real Estate International's funding will remain supported on
a limited basis for some time by HVB, according to the rating
agency.
Moody's said it expects WuerttHyp to remain one of the stronger
German mortgage banks, but warns that "WuerttHyp's profitability
could be hurt if Hypo Real Estate Bank were to need additional
support in excess of the extra cushion provided by HVB."
The ratings of WuerttHyp's mortgage Pfandbriefe have been
downgraded to Aa3 from Aa2 and the ratings of the bank's public-
sector Pfandbriefe to Aa2 from Aa1.
The outlook on all long- and short-term debt and deposit ratings
and FSRs is stable.
=============
I R E L A N D
=============
ELAN CORP: Receives USD89.5MM Payment From Investments in Xcel
--------------------------------------------------------------
Elan Corporation, plc announced that Elan has received $89.5
million in cash from its investment in Xcel Pharmaceuticals, Inc.
In 2001, Elan purchased three million Xcel Series A-1 preferred
shares. Additionally, in 2001 and 2002, Xcel issued a total of
$109.0 million of loan notes to Elan. The net carrying value of
the shares and loan notes as at March 31, 2003, which had been
written down in anticipation of this transaction, amounted to
$91.6 million. Under the terms of the agreement, Xcel has
purchased all of Elan's shareholding in Xcel and the loan notes
have been retired in full at a discount. Elan expects to record
a pre-tax loss of $2.1 million in the first quarter of 2003 in
respect of the transaction.
The proceeds from the transaction will form part of Elan's
targeted proceeds from the divestment of assets as outlined in
its recovery plan. To date, the total cash received by Elan
through asset divestitures is in excess of $825.0 million.
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.
*****
Shares in Elan suffered as a result of a U.S. accounting probe
and a number of setbacks in its product pipeline.
Elan Chief Executive Kelly Martin is tasked to find a buyer for
the company. He is bound to get EUR5 million (GBP3.3 million)
from the troubled Irish pharmaceutical group once it strikes a
deal to sell the company this year.
HVB IRELAND: Moody's Upgrades Financial Strength Rating to 'C'
-------------------------------------------------------------
Moody's downgraded HVB Ireland's short-term deposit and debt
ratings to P-2, confirmed the bank's A3 long-term deposit rating
and upgraded its FSR to C from C-.
HVB is planning to transfer its main activities in commercial
real estate financing to the new Hypo Real Estate Group--
including the entire European Real Estate Finance business.
The move will involve its three mortgage subsidiaries, WurttHyp,
HVB Real Estate Bank and WestHyp, which are being contemplated
for spin-off in the autumn of 2003.
WestHyp will become a subsidiary of Hypo Real Estate Bank, the
new name for HVB Real Estate, and then the banks will be merged.
WuerttHyp will be the second future subsidiary of Hypo Real
Estate Holding, the new management holding company for the real
estate group.
HVB Ireland will be named Hypo Real Estate Bank International and
would become the third bank subsidiary of Hypo Real Estate
Holding.
It will incorporate HVB's European commercial real estate
business, including the branches in the large European cities and
the mortgage banks in Holland and Luxembourg.
According to the rating agency, HVB Group shareholders will
receive an additional share of the holding for four HVB-shares
and will vote on the spin-off at the Annual General Meeting on
May 14 this year.
The transaction relating to HVB Ireland is also subject to the
approval of Irish regulators.
The new Hypo Real Estate Bank is expected to become the biggest
bank in the new Hypo Real Estate Group with the largest
commercial real estate portfolio.
Hypo Real Estate International will then become a transaction-
focused commercial real estate lender.
But it is in the rating agency's opinion that the combination of
both banks will remain structurally affected by HVB Real Estate's
work-out activities, which includes reduction of exposure to the
difficult German commercial real estate market.
The ratings of HVB Real Estate's mortgage Pfandbriefe have been
downgraded to A1 from Aa1.
The outlook on all long- and short-term debt and deposit ratings
and FSRs is stable.
=========
I T A L Y
=========
FIAT SPA: Fimeccanica Wants to Bid With U.S. Private Equity Group
-----------------------------------------------------------------
Finmeccanica chairman Pierfrancesco Guarguaglini confirmed the
company's intention to bid for Fiat Avio with U.S. group Carlyle,
with which it is currently in talks.
Private equity company Carlyle was understood to have indicated
earlier it was interested in launching a bid with
DaimlerChrysler's MTU subsidiary, which also makes aviation
engines.
But the tandem is perceived as less favorable, since it is
unlikely to appeal to the Italian government which wanted to
retain some Italian ownership in the unit.
The government, which holds a controlling 32% stake in
Finmeccanica, is until recently seemed to be backing a Franco-
Italian bid for the aeronautics unit of the Fiat group.
The bid would have combined the resources of Finmeccanica and
Snecma, the aerospace company that is wholly owned by the French
government, according to the Financial Times.
But the parties are understood to have aborted the plan due to
pressures from the French state, Dow Jones said.
Fiat is selling Fiat Avio to reduce debt and raise cash for its
loss-making car division. It intends to raise at least EUR1.5
billion (US$1.64 billion) from the sale.
Mr. Guarguaglini ruled out lowering Finmeccanica's 18% stake in
chipmaker STMicroelectronics to fund a joint bid for Fiat Avio.
CONTACT: FIAT SPA
250 Via Nizza
10126 Turin, Italy
Phone: +39-011-686-1111
Fax: +39-011-686-3798
Toll Free: 800-804027
Home Page: http://www.fiatgroup.com/e-index.htm
FINMECCANICA SPA
4, Piazzi Monte Grappa
00195 Rome, Italy
Phone: +39-06-324731
Fax: +39-06-3208621
Home Page: http://www.finmeccanica.it
Contact:
Pier F. Guarguaglini, Chairman and CEO
Roberto Testore, CEO and Managing Director
THE CARLYLE GROUP
1001 Pennsylvania Ave.
NW, Ste. 220 South
Washington, DC 20004-2505
Phone: 202-347-2626
Fax: 202-347-1818
Home Page: http://www.thecarlylegroup.com
Contact:
Louis V. Gerstner Jr., Chairman
Rt. Hon. John Major, Chairman, Carlyle Europe
TELECOM ITALIA: Board of Seat Approves Spinoff Project
------------------------------------------------------
The Board of Directors of Seat Pagine Gialle Approves the Spinoff
Project for the Directories Business Area
The Board of Directors of Seat Pagine Gialle, chaired by Riccardo
Perissich, approved the proportional spin-off project for the
Directories business area (telephone directories, directory
assistance and business information) in favor of a newly
incorporated company.
This transaction will lead to the creation of two independent
companies, each focusing its industrial, financial and managerial
resources on its core businesses. Two separate developments are
in fact emerging in terms of activity, competition and
characteristics of the potential market. On the one hand is the
Directories line of business that provides answers to queries
made via printed, online and telephone products and services, on
the other hand the Internet and TV access and content services
(and the supply of office products) represents the other line of
business.
The former operates in the market of targeted advertising and
telephone services, and the latter operates in the market of
traditional advertising and the Internet. Both sectors represent
interesting development perspectives (including development in
the broadband access and digital TV).
The strategic objective of the operation approved today by the
Board of Directors is to allow each of the two business lines to
grasp more rapidly all market opportunities, thanks to a more
focused management and a resource allocation consistent with the
development prospects of each business line.
Details of the operation
The spin-off plan envisages that Seat (the split company)
transfer to a newly established company (the spunoff company) the
directories and directory-assistance activities of the Italian
business line (including printed products, Pagine Gialle On Line
and Kompass, as well as 89.24.24 Pronto Pagine Gialle, TDL
Infomedia-Thomson Directories, Euredit, Telegate and the main
Business Information activities (Consodata, Netcreations,
Panadress).
-- Effective as of the date of spinoff, the company effecting the
spin-off will change its corporate name from Seat PG S.p.A. to
Telecom Italia Media S.p.A.. With a pro forma consolidated
turnover for 2002 amounting to Euro 577 million in the Internet
and Television markets (as well as office products), the company
will strengthen its presence and visibility in such markets in
full coordination with the strategy of the Telecom Italia Group.
The net financial position of the split company (based on the pro
forma consolidated balance sheet at December 31, 2002) shows a
cash income balance of Euro 37 million.
-- Effective as of the date of the spinoff, the spunoff company
will be called Seat Pagine Gialle S.p.A. and will have a pro
forma consolidated turnover for 2002 amounting to Euro 1,445
million. The pro forma consolidated net financial indebtedness
amounted to Euro 717 million at December 31, 2002.
The new Seat Pagine Gialle will become one of the main pure
telephone directories publishers in Europe, with a significant
market share in Italy, the U.K. and Germany. The greater focus on
directory publication - which has been deemed by Telecom Italia
no longer to be strategic with respect to the core
telecommunications business - will enable the spunoff company to
make the most of the full potential offered by the development of
the key-word search services market, particularly in the online
sector.
Based on the spinoff project, share capital of the company
effecting the spin-off will amount to Euro 93,825,465.36 million;
the share capital of the spunoff company will amount to Euro
247,358,045.04 million.
Since the spin-off is being effective on a proportional basis,
the allocation of the shares of the company effecting the spin-
off and the spunoff company is based on net assets of each
company as of December 31, 2002. Consequently, for every 40
ordinary (or savings, as applicable) shares currently owned, the
present shareholders of Seat Pagine Gialle S.p.A. will receive:
o 11 new ordinary (or savings, as applicable) shares of the split
company (the company that will be called Telecom Italia Media
S.p.A.)
o 29 new ordinary shares (or savings, as applicable) of the
spunoff company (that will be called Seat Pagine Gialle S.p.A.)
The shares of both companies will be listed on the automated
screen-based trading system (Mercato Telematico Azionario) of
Borsa Italiana: the effectiveness of the spinoff is conditioned
upon the shares of the spunoff company (the new Seat Pagine
Gialle) being accepted for listing.
SEAT Pagine Gialle is being advised in connection with the spin-
off by MCC which will also act as sponsor for the listing of the
spunoff company on Mercato Telematico Azionario.
The calling of the Extraordinary General Shareholders' Meeting
has been delegated to the Chairman of the Board of Directors.
In the same meeting, the shareholders will, as part of their
Ordinary General Shareholders' Meeting, approve the annual
financial statements for 2002.
The Board acknowledged the existence of special needs that,
pursuant to Article 11 of the company's Bylaws, allow the company
to postpone the date term for the approval of the annual
financial statements by four months. Consequently, for the time
being the General Shareholders' Meeting is expected to be
convened by the first half of May.
***
The Board also decided to submit an amendment to the company
Bylaws to the General Shareholders' Meeting for approval. This
amendment would envisage the right for the Shareholders' Meeting
to pay dividends to savings shareholders, drawing from available
reserves, without prejudice to all other rights enjoyed by the
special share category.
The Board also decided that, if the above-mentioned amendment is
approved, it will propose that the General Shareholders' Meeting
approve the allotment of a dividend of Euro 0.003 per share for
each of the 187,689,368 savings shares issued, for a total amount
of Euro 563,068.104, drawing this amount from the share premium
account. This dividend - that will become payable as of May 22,
2003, with detachment of coupon on May 19, 2003 - does not
represent a profit pursuant to Art. 44 of Presidential Decree 917
of December 22, 1986 and subsequent amendments and riders, as it
is a distribution of reserves accumulated using share premium
amounts. Consequently, no right to tax credit shall ensue from
the payment of these dividends, as they do not constitute taxable
income for the recipients.
-- SEAT's ability to obtain its shareholders' consent to the
proposed spin-off;
-- SEAT's ability to implement its business plan with respect to
its remaining businesses, including asset disposals, greater
integration with Telecom Italia's other businesses and synergies
arising there from;
-- SEAT's ability to make any profits from the remaining business
for the next two years at least;
-- SEAT's ability to achieve cost reduction targets in the time
frame established or to continue the process of rationalization
of its non-core business and the disposition of interests in
certain non-core assets;
-- SEAT's ability to implement successfully its Internet
strategy;
-- New SEAT Pagine Gialle's ability to list the ordinary shares
and savings shares on the Mercato Telematico of Borsa Italiana
S.p.A.;
-- New SEAT Pagine Gialle's ability to continue the successful
operation of the spun-off businesses and to successfully
integrate businesses that were recently acquired by SEAT Pagine
Gialle;
-- New SEAT Pagine Gialle's ability to achieve the expected
return on investments and capital expenditures SEAT Pagine Gialle
has made that are now being spun-off to New SEAT Pagine Gialle;
-- New SEAT Pagine Gialle's ability to implement successfully its
strategic plan;
-- the continuing impact of increased competition, including the
entry of new competitors;
-- the impact of regulatory decisions and changes in the
regulatory environment in Italy and elsewhere in Europe; and
-- the continuing impact of rapid changes in technologies.
The foregoing factors should not be construed as exhaustive. Due
to such uncertainties and risks, readers are cautioned not to
place undue reliance on such forward-looking statements, which
speak only as of the date hereof. Neither SEAT and New SEAT
Pagine Gialle undertake an obligation to release publicly the
result of any revisions to these forward-looking statements which
may be made to reflect events or circumstances after the date
hereof, including, without limitation, changes in our business or
acquisition strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.
===================
L U X E M B O U R G
===================
METROMEDIA INTERNATIONAL: Announces Important Company Decisions
---------------------------------------------------------------
-- Announces Agreement In Principle To Exchange Certain Business
Assets For $58.6 Million Of Its 10 1/2% Senior Discount Notes And
$5 Million Cash
-- Announces Delay In The Payment Of Interest On Its 10 1/2%
Senior Discount Notes
-- Announces That It Does Not Declare Preferred Stock Dividend
-- Announces Inability To File Form 10-K
Metromedia International Group, Inc., the owner of interests in
various communications and media businesses in Eastern Europe,
the Commonwealth of Independent States and other emerging
markets, on Monday announced that it executed a non-binding
letter of intent with Adamant Advisory Services, a British Virgin
Islands company, to exchange the company's ownership interest in
certain of its business units in Russia for approximately $58.6
million, face value, of the company's 10 1/2 % Senior Discount
Notes. Currently, $210.6 million in face value, excluding accrued
interest, is outstanding on the Senior Notes (inclusive of the
Senior Notes associated with the Adamant transaction).
As part of the transaction, the company will convey to Adamant
its ownership interests in Comstar (a Moscow based fixed-line
telephony operator), Kosmos TV (a Moscow based cable television
operator), and the company's Russian radio assets. In addition to
conveying the Senior Notes to the company, Adamant will pay US$5
million in cash and also release the company of its obligation to
pay interest accrued on the Senior Notes (the current obligation
is $3 million).
Final closure of the exchange is conditioned on execution of
definitive agreements and receipt of certain third party
approvals, including those by Russian regulatory authorities, all
of which are expected within weeks.
In making this announcement, Mark Hauf, Chairman, President and
Chief Executive Officer of the company, commented, "This
transaction relieves a significant amount of financial pressure
that the company faces. It is a major step towards our goal of
placing the company on a sound and stable financial footing."
With the conclusion of this transaction, approximately $152
million, face value, of the company's Senior Notes will remain
outstanding.
The company also announced that it did not pay the $11.1 million
interest due on March 31, 2003 for the Senior Notes that
currently remain outstanding (inclusive of the Senior Notes
associated with the Adamant transaction). The company has a 30-
day grace period for making the interest payment under the
indenture governing the Senior Notes. Further, the company
announced that it will not declare a dividend on its 7 1/4%
cumulative convertible preferred stock for the quarterly dividend
period ending on March 15, 2003. With respect to these decisions,
Mr. Hauf commented, "The company faces liquidity problems that
would only be aggravated by these interest and dividend payments.
We continue active engagement with our key financial stakeholders
on debt restructuring measures in an effort to resolve our
liquidity issues in a fashion that best preserves value for all
interested parties."
To date, the company and representatives of holders of the
remaining Senior Notes have not reached agreement on terms of a
restructuring of their Senior Notes. The company cannot make any
assurance that it will close the transaction with Adamant or be
successful in raising sufficient additional cash through asset
sales or through cash repatriations from its business ventures to
meet its remaining debt and operating obligations. Nor can it
make any assurance regarding the successful restructuring of its
indebtedness. If the company is not able to reach agreements that
favorably resolve the issues described here, the company may have
to resort to certain other measures, including ultimately seeking
the protection afforded under the United States Bankruptcy Code.
Furthermore, any negotiated restructuring of the company's
indebtedness may require that the company seek the protection
afforded under the reorganization provisions of the United States
Bankruptcy Code in order to successfully effectuate a
restructuring. Since the company cannot assure you that it will
be successful in meeting or restructuring its obligations, there
remains reasonable doubt about the company's ability to continue
as a going concern.
The company also announced that it has not completed its Annual
Report on Form 10-K for the fiscal year ended December 31, 2002,
including the finalization of its annual audited financial
statements. The company will, therefore, not file its Form 10-K
with the United States Securities and Exchange Commission at this
time. The company continues to devote substantial time and effort
to reorganization of its finances, while reducing overhead
related expenditures in response to current liquidity pressures.
These measures sharply limit the resources that can be allocated
to compile information necessary to complete the
Form 10-K and also the annual audited financial statements.
Management cannot at this time provide any further guidance as to
when or if the Form 10-K will be filed with the SEC nor when or
if the annual audited financial statements will be completed.
About Metromedia International Group
Metromedia International Group, Inc. is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States and other emerging markets. These include
a variety of telephony businesses including cellular operators,
providers of local, long distance and international services over
fiber-optic and satellite-based networks, international toll
calling, fixed wireless local loop, wireless and wired cable
television networks and broadband networks and FM radio stations.
CONTACTS: METROMEDIA INTERNATIONAL GROUP, INC.
Ernie Pyle
Senior Vice President Finance,
Chief Financial Officer and Treasurer
Phone: (212) 527-3800
VINTAGE CAPITAL: Fitch Affirms 'CCC' Ratings of Class C Notes
-------------------------------------------------------------
Fitch Ratings, the international rating agency, has downgraded
Vintage Capital S.A.'s floating-rate notes as follows:
Class A1 & A2 to 'AA+' from 'AAA'; Class B to 'BB+' from 'BBB-'
('BBB minus');
The class C notes are affirmed at 'CCC'.
In December 2000, Vintage Capital S.A., a special purpose vehicle
(SPV) with limited liability incorporated under the laws of
Luxembourg, acquired a bond portfolio originated by Banca Monte
dei Paschi di Siena and a credit default swap portfolio
originated by Bank of America. At closing these acquisitions were
financed by issuing EUR198 million floating-rate notes and a
EUR162m senior swap. The bond portfolio contains asset-backed
securities (ABS), corporate, financial institution and sovereign
debt. The combined weighted average Fitch factor for both
portfolios has decreased from 'BBB+' at the closing date to 'BBB-
', due to the downgrade of some of the underlying ABS and
corporate assets. These downgrades include British Energy, Royal
Ahold N.V. and Helix 2001-1.
Fitch has reviewed the performance of the portfolio in detail. To
date there have been no defaults in the bond portfolio, though
there are four ABS assets rated below 'CCC+', two of which carry
a default rating. The notional value of these ABS assets
comprises 7.8% of the portfolio. There have been no credits
events in the reference portfolio though it does contain British
Energy rated 'C' Rating Watch Negative, Lucent Technologies rated
'CCC+' and TXU Europe rated 'D'.
The transaction has semi-annual payment dates in June and
December, with a final maturity date in December 2010. Deal
information and historical performance data for this transaction
is available on Fitch Ratings' web site at
http://www.fitchratings.com
=====================
N E T H E R L A N D S
=====================
GETRONICS: Standard & Poor's Raises Credit Rating
-------------------------------------------------
Credit rating agency Standard & Poor's have raised Getronics
credit rating from CC to B-. This is a positive response to
Getronics entrepreneurial solution to managing our long-term
debt, announced on March 21.
Standard & Poor's stated that Getronics' long-term rating is
likely to remain in the B rating category, assuming that our debt
is cut in line with expectations and restructured so as to avoid
liquidity issues - in particular concerning the maturity of the
2004 and 2005 convertible bonds.
KLM ROYAL: Takes Further Measures in Lieu of Current Events
-----------------------------------------------------------
Adverse effects on transport resulting from the Iraq crisis and
SARS virus
In view of the current world developments, KLM Royal Dutch
Airlines will soon implement far-reaching measures to effect a
direct improvement in results.
The company has also taken a variety of specific measures in an
attempt to improve returns on the longer term. KLM will now go
about identifying initiatives for the whole of the KLM Group
which could contribute to a structural ten percent reduction of
unit costs. The first results of these steps will be demonstrated
in the fiscal year, which begins today.
On the short term, KLM is intensifying its company-wide focus on
reducing costs and is aiming to maximize its cash position.
Furthermore, the company is initiating an employment stop and
will reevaluate all planned investments. All previous measures
and those set for the short term will be assessed according to
their ability to contribute to improving results. A conscious
choice has been made to avoid any measures which only add
incidentally to cost-savings.
On the longer term, KLM believes that the aviation sector will
have to improve its results if it is to survive. In the past ten
years, the average returns have fallen below 2% annually. For
several months now, KLM has been making changes to bring about a
lasting positive effect in the company. In the course of this
year, the implementation of a new fleet will bring about lower
unit costs. KLM has already instituted a company-wide purchasing
policy based on reducing costs at every level. Within the
dynamics of their own market environment, the various business
units will be taking measures to improve results. By adapting its
product and service model, KLM will be able to respond to
changing customer demand. The company has set up a temporary
project organization to identify and join supplementary
initiatives to effect structural cost reduction.
Impact on workforce
The measures outlined above will have an impact on our workforce.
The exact short-term consequences will only become clear in a
couple of weeks. Based on an interim inventory of longer-term
initiatives, KLM expects to cut several thousand jobs. A number
of measures have therefore been implemented with immediate
effect. One of these is a general recruitment stop. In addition,
temporary employment contracts will not be extended and the
hiring of external workers and advisors will be almost completely
suspended. It is, however, inevitable that forced lay-offs will
be required. KLM today informed the Works Council and trade
unions of its decision.
Capacity adjustments
During the coming weeks, KLM will take a flexible approach in
responding to developments in traffic demand in various markets.
On March 20, KLM announced capacity adjustments particularly on
routes to the Middle East and North America. Some of these have
already been implemented. KLM has now also adjusted capacity in
other route areas in response to declining demand resulting from
developments surrounding the SARS virus. All (temporary) schedule
adjustments can be found on www.klm.com and in KLM reservations
systems.
===========
N O R W A Y
===========
NORSKE SKOG: Terminates Norske Skog Klabin Joint Venture
--------------------------------------------------------
In accordance with the original agreement, the Norske Skog Klabin
Joint Venture is now terminated. The company was created in
February 2000, and comprised PM 6 at Klabin's Monte Alegre mill
in Brazil. The paper machine, with an annual capacity to produce
130,000 tonnes of newsprint, has now been delivered back to
Klabin and will hereafter produce packaging grades.
- The Norske Skog Klabin J/V marked Norske Skog's entrance in
South America, which is an important growth region, says Norske
Skog's President and CEO, Mr Jan Reinas. - Through Norske Skog
Klabin and the Pisa mill that was acquired later, Norske Skog has
become the only domestic supplier in Brazil and also by far the
largest South American-based supplier.
Norske Skog has developed good long-term relations with customers
in Brazil. After the termination of Norske Skog Klabin, customer
relations and market shares will be maintained by shipping
newsprint from the mills in Europe.
The decision to take out 130,000 tons without adding new capacity
is in accordance with Norske Skog's global capacity management
philosophy. Longer term, Norske Skog will realise its plans to
build a second paper machine at the Pisa site, thereby
capitalizing on Pisa's existing infrastructure and the low-cost
wood from nearby plantations.
*****
Standard & Poor's recently placed the outlook on Norske Skog's
ratings at negative and downgraded its short-term corporate
credit rating to 'A-3' from 'A-2'.
The negative outlook and the downgrade of the short-term rating
reflect Norske Skog's weakening financial performance," Standard
& Poor's credit analyst Alf Stenqvist said.
"Any further weakening of Norske Skog's credit measures in 2003,
or an absence of signs of recovery in market conditions and the
group's operating cash flow in the medium term, could lead to
ratings being lowered," added Mr. Stenqvist.
The rating agency recognizes that Norske Skog has started to
implement several cost-cutting initiatives to counter the effects
of the persistent weak market conditions for its main products of
newsprint and magazine papers.
CONTACT: NORSKE SKOG
Corporate Communication
Rune Gjessing, Director Investor Relations
Phone: + 47 67 59 90 73
+ 47 901 52 614
===========
P O L A N D
===========
BANK GOSPODARKI: Ministry Considers Merger With PKO BP
------------------------------------------------------
Poland's Treasury Ministry is considering the possibility of
merging Bank Gospodarki Zywnosciowej and PKO BP in order to solve
the troubles in both banks.
The merger might just solve the troubles of BGZ, which has been
in crisis for three years, and at the same time take care of the
privatization of PKO BP.
BGZ posted a net loss of PLN264.3 million. Its return on capital
and financial results are also continually deteriorating.
Yet, there are those who warned against possible negative effects
of the merger.
According to them, the move might cripple PKO BP's
competitiveness as the acquisition does not represent something
new nor valuable to PKO.
PKO BP also potentially faces new difficulties when it combines
IT systems, as well the need to further restructure employment
and the branch network, they said.
According to unofficial information of Warsaw Business Journal,
the merger will take place at the end of next year.
NETIA HOLDINGS: Subsidiary Ends Agreement With Consultant
---------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, on Monday announced that
its subsidiary, Netia Telekom Mazowsze S.A., agreed the terms of
termination with immediate effect of the consulting agreement,
dated June 1, 2000, with IGEO Consulting Limited, a company
controlled by Mr. Hochman.
A six-month non-compete period for providing consulting services
by IGEO Consulting Limited was agreed. The value of the benefits
to be received by IGEO Consulting Limited does not exceed 0.25%
of the shareholders' equity of Netia Holdings S.A. on a stand-
alone basis as of December 31, 2002, calculated in accordance
with the Polish Accounting Standards.
NETIA HOLDINGS: Terminates Contracts With Board Members
-------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, on Monday announced that
Netia and its subsidiaries agreed the terms of terminating with
immediate effect the contracts with Ms. Ewa Don-Siemion and Mr.
Avraham Hochman, following the resignation from their positions
as members of Netia's management board effective March 6, 2003.
Ms. Ewa Don-Siemion will receive from Netia and its subsidiaries
her remuneration for the current month (March 2003) along with a
severance payment and will be entitled to some previously
acquired non-cash benefits until October 31, 2003. Netia has
agreed to indemnify Ms. Ewa Don-Siemion from any personal
liability that may arise in connection with the Restructuring
Agreement dated March 5, 2002. A six-month non-compete period was
agreed.
Mr. Avi Hochman will receive from Netia and its subsidiaries his
remuneration for the current month (March 2003) and will be
entitled to some previously acquired non-cash benefits until
October 30, 2003. Netia has agreed to indemnify Mr. Avi Hochman
from any personal liability that may arise in connection with the
Restructuring Agreement dated March 5, 2002.
The total value of the benefits to be paid in connection with the
above termination agreements does not exceed 0.25% of the
shareholders' equity of Netia Holdings S.A. on a stand-alone
basis as of December 31, 2002, calculated in accordance with the
Polish Accounting Standards.
=====================
S W I T Z E R L A N D
=====================
MOVENPICK GROUP: Completes Sale of Ice Cream Brands to Nestle
-------------------------------------------------------------
The previously announced sale of Movenpick's world-wide ice cream
brands to Nestle S.A. has now been completed as per March 31,
2003. This transaction is a major step in the cutback in the
business portfolio, which was initiated last year. It places the
focus of the Group's operational activities on Movenpick's
traditional business fields: gastronomy and hotels.
The Movenpick Group has four Divisions in the restaurant, hotel
and food businesses: The Movenpick Gastronomy Division with 113
restaurants; Movenpick Hotels & Resorts, managing 48 business
hotels and resorts in 14 countries; Movenpick Wine, which
operates an integrated wine sales system for private and business
customers and Movenpick Fine Foods, which sells premium products.
Together with management and franchise operations, the Movenpick
Group generated sales of around CHF 1,166.0 million in the
financial year 2002. Licence partners for food products and
restaurants achieved additional sales of CHF 284.3 million.
Movenpick employs around 13,800 people all over the world. The
bearer and registered shares of Movenpick Holding, which is
domiciled in Cham, Switzerland, are listed on the Swiss stock
exchange.
*****
Movenpick decided to step up its focus on the Hotels&Resorts and
Gastronomy Divisions after experiencing a slump in both sales and
profits.
In a statement issued last month, the company said, "measures
already implemented to streamline the various operating areas
will pave the way to improved profitability."
CONTACT: Lilly Frei, Head of Corporate Communications
Zurichstrasse 106
CH-8134 Adliswil
Phone: +41 1 712 22 01
Fax: +41 1 712 24 81
===========================
U N I T E D K I N G D O M
===========================
AORTECH INTERNATIONAL: To End Investment in Polymer Heart Valve
---------------------------------------------------------------
AorTech International plc announced on January 6, 2003 that
future activity would be concentrated on the company's
biomaterials business and on the research and development program
for its polymer heart valve.
After thoroughly re-assessing and recognizing the now limited
market opportunity for a stented, tri-leaflet polymeric heart
valve and endeavoring but failing to find a partner to share the
lengthy and significant development and regulatory costs, the
company has decided that it has little option but to terminate
investment in this project. However, in spite of this, the
company believes that the technology behind the polymer valve is
significant and that it has made advances in valve design,
performance and manufacturing. New IP has been filed for the
polymer valve, including the percutaneous application of the
technology.
The company will continue to seek a partner to exploit this
intellectual property and know how. Termination of the investment
in this development project will reduce the company's cash burn
significantly, enabling it to concentrate on its biomaterials
activity.
AorTech Biomaterials is focused on a variety of applications for
its proprietary composite silicone/polyurethane material Elast-
Eon. These include applications for cardiovascular,
interventional cardiology, orthopaedic, cardiac rhythm
management, plastic surgery, urology and ENT.
New customer contacts have been established for biomaterials
business partnerships in a number of medical device areas.
The company continues to seek a buyer for the intellectual
property rights to the TruCCOMS Continuous Cardiac Output
Monitoring System.
CONTACT: AORTECH INTERNATIONAL PLC
Phone: 01698 746 699
Bill Strachan, Chief Executive
Ian Cameron, Finance Director
COLLEGE HILL
Phone: 020 7457 2020
Nicholas Nelson
Clare Warren
AORTECH INTERNATIONAL: Closure in Scotland to Cut 30 Jobs
---------------------------------------------------------
Around 30 jobs will be axed as a result of the closure of Aortech
International's operations in Lanarkshire Scotland, a base it
occupied for about 10 years.
The company has been gradually cutting its 200 workforce over the
past year as cash crisis and poor economic conditions erode
finances.
The job cuts will leave only 16 staff in the company's laboratory
in Australia, and "a small number of executives" at an
undetermined location in Scotland, according to The Herald.
Ian Cameron, AorTech's finance director who is greatly saddened
with the firm's predicament said, "Both the costs and the
development time were greater than we had anticipated.
"Access to the capital we needed to develop our products was also
difficult, given the economic conditions."
Aortech's shares will continue listing in the UK, where the bulk
of their shareholders are, Mr. Cameron revealed.
"But for all intents and purposes, AorTech will no longer be
operating in Scotland," he said.
The company earlier this year sold its traditional commercial
heart-valve business to German group Koehler Chemie for GBP2.7
million.
With that unloaded, it was hoping that its revolutionary tri-
leaflet device could hitch it off towards becoming world leader
in the technology.
But severe cash crisis left it crippled. In November, Aortech
reported half-year losses of GBP7.6 million.
AQUILA INC.: Moody's Downgrades Ratings on Cash Concerns
--------------------------------------------------------
Moody's Investor Service downgraded Aquila Inc.'s senior implied
rating to B3 from B1, and its senior unsecured rating to Caa1
from B1. It also downgraded the ratings on the company's
subordinate debt to Caa3 from B2, preferred stock to Ca and B3,
subordinate shelf (P) to Caa3 from (P)B2, and junior sub. shelf
to (P)Caa3 from (P)B2. The Issuer Rating of Aquila Merchant
Services was withdrawn.
The rating agency characterized the Kansas-based company as
having weak cash flow generation relative to total debt. This is
despite recent asset divestitures.
Carrying on its review of the company's activities, the rating
agency commented that the proceeds of asset sales did not reduce
debt commensurate with the amount of debt that was incurred to
purchase the same assets.
Because of weak operating cash flow, Moody's expects Aquila to
"continue to carry a substantial debt burden even if its efforts
to streamline to a more stable base of assets are successful."
Moody's also warned of liquidity concerns related to the
unwinding of the company's trading business, and of near-term
liquidity pressures.
The rating outlook is negative to reflect the strain on the
company's liquidity in the near term, and a reliance upon asset
sales to meet its obligations over the next year.
With this, Moody's foresees a need for the refinancing of the
company's syndicated bank credit facilities this month.
Aquila Inc., operates a regulated electric and gas networks
business in the U.S., Canada, Australia and the U.K., and owns
other energy assets.
CABLE & WIRELESS: Announces Release of Funds From Escrow
--------------------------------------------------------
Cable & Wireless announced Tuesday that the GBP1.5 billion, which
it paid into escrow on January 13, 2003 in respect of the
disposal of One2One in 1999, has been released to Cable &
Wireless. This follows the company's announcement on 25 March in
which it indicated that it expected those funds to be released
shortly.
*****
Moody's downgrade of Cable & Wireless' GBP2.5 billion (US$3.95
billion) bonds from Baa2 to Ba1 activated the complex arrangement
of the company with Deutsche Telekom on the sale of the former's
stake in One2One. As a result, the telecom company has to put
GBP1.5 billion of its GBP2.2 billion in net cash into an escrow
account since it earlier agreed to set aside GBP1.5 billion to
cover potential tax liabilities arising in future years should
its credit rating fall below investment grade.
CABLE & WIRELESS: Announces Disposals in Continental Europe
-----------------------------------------------------------
-- IP-eYe to buy Cable & Wireless' domestic businesses in
Northern Europe
-- Smart Telecom SA to buy the Cable & Wireless' domestic
business in Switzerland
Cable & Wireless, the global telecommunications group, on Tuesday
announced it has entered into conditional agreements to sell all
of its businesses that relate to customers requiring domestic-
only services in the Belgium, Netherlands, Sweden and Russia in
Northern Europe and Switzerland.
IP-eYe, backed by senior managers currently within Cable &
Wireless' Northern European business, is buying the domestic
businesses in the Netherlands, Belgium, Sweden and Russia. IP-
eYe's focus is on national and multinational businesses in
Europe, offering web solutions, hosting, network integration and
data services. Following completion, customers taking Cable &
Wireless' domestic services will be served by IP-eYe while those
using Cable & Wireless' multi-regional services will continue to
be served by Cable & Wireless. Additionally, IP-eYe will
distribute Cable & Wireless products in its own markets.
Smart Telecom, a well-established Swiss telecommunications
company providing voice and data services to Swiss-based
customers through a number of locally situated subsidiaries, most
notably VTX, is to buy Cable & Wireless' Swiss domestic business.
Cable & Wireless will work closely with Smart Telecom to ensure a
seamless service to its respective customers.
The disposals are part of Cable & Wireless' strategy announced in
November to focus on serving multinational enterprises and
service providers in continental Europe and to withdraw from
domestic-only services. After the disposals, Cable & Wireless
will retain network and business operations in Brussels,
Amsterdam, Copenhagen, Stockholm, Moscow and Switzerland,
enabling the company to concentrate resources on providing
business-critical information and communications services to
European and multinational enterprises and service providers.
Capabilities will also be retained in Rotterdam and Luxembourg to
service Cable & Wireless target customers.
"The sale of these businesses is expected to mark the first in a
series of transactions across Europe that will allow us to
provide an even higher level of service to our target customers,"
said Robert Drolet, CEO continental Europe, Cable & Wireless. "We
look forward to a close working relationship with IP-eYe and
Smart Telecom and ensuring a smooth transition for customers and
employees."
Completion is subject to certain conditions, including the
granting of certain telecommunications licenses and other
statutory and regulatory approvals. The aggregate net assets of
the businesses being sold to IP-eYe are approximately Euro 2
million. The value of the net assets of the business being sold
to Smart Telecom is approximately Euro 300,000.
Within continental Europe, Cable & Wireless is focused on serving
multinational enterprises and service providers, such as Heinz,
Royal Dutch Shell, Diesel and Vodafone, providing high
performance Internet protocol (IP), data and wholesale voice
services across 20 major business centres in continental Europe
and throughout the U.K., U.S. and Asia. Cable & Wireless also
supplies IP transit to major telecommunications operators in
virtually every European country, including nearly two thirds of
European incumbents.
Cable & Wireless specialises in offering a full portfolio of end-
to-end computing and communications solutions as it has one of
the most advanced global IP networks (independently rated by
MIQ.net), with the best connections to the world's most popular
content (according to Nielsen Net Ratings). It also offers
complex web hosting and network computing expertise, all backed
by industry-leading service level agreements.
About Cable & Wireless
Cable & Wireless is a major global telecommunications business
with revenue of over o5.9 billion (US$8.6 billion) in the year to
31 March 2002 and customers in 80 countries. It consists of two
core and complementary divisions: Cable & Wireless Regional and
Cable & Wireless Global. Cable & Wireless Regional offers a full
range of telecommunications services in 33 countries around the
world, with major businesses in the Caribbean, Panama, the Middle
East and Macau. Cable & Wireless Global provides IP (Internet
protocol), voice and data services and managed solutions for
business customers. It has developed advanced IP networks and
value-added services in the U.S., Europe and the Asia-Pacific
region in support of this strategy. Building on its strong
national businesses in the U.K. and Japan, Cable & Wireless
Global will focus on serving primarily multinational companies
(both enterprises and service providers) in the US, UK,
continental Europe and Japan/Asia. For more information about
Cable & Wireless, go to http://www.cw.com
About IP eYe
IP-eYe is a European Internet & network services provider driven
by the passion to deliver best of breed solutions in hosting,
networks and services. IP-eYe delivers integrated solutions to
businesses that want to optimise the use of Internet and networks
in order to give optimal support to their operations. The
strength of IP-eYe is based on its ability to translate business
and ICT drivers into scalable, flexible and secure Internet and
network solutions offering excellent return on investment and low
cost of operations, starting from functional design right up to
operational management. IP-eYe has offices in Amsterdam,
Hoofddorp, Veenendaal, Brussels, Stockholm and Moscow. For more
information go to www.ipeYe.net.
About Smart Telecom
Smart Telecom is an independent operator in the data
communications market and in selected voice services in
Switzerland. It's main target customer groups are small and
medium sized enterprises to which it provides innovative and
reliable services backed up with strong local customer support.
It's main Internet focussed product groups include access
services, web hosting, Applications Service Provision (ASP) and
web design. In voice services, Smart focusses on business number
services.
The company was created in 1986 and has its headquarters in Pully
(Lausanne); Smart Telecom employs 150 staff in 8 offices
throughout Switzerland, half in networks and technical support
and half in sales, marketing and administration. Estimated
turnover for 2002 is Euros 45m.
CONTACT: CABLE & WIRELESS
Nicola Porter
Phone: +44 20 7315 4031
SMART TELECOM
Philippe Roditi
Phone: +41 21 721 1114
IP-EYE
The Netherlands
Jan van Berne
Phone: +31(0)30 602 99 00
IP-EYE
Swedish
Frederik Engvall
Phone: +46 (0)8 459 94 67
Samantha Ashworth
Phone: +44(0) 207 315 4460
Caroline Stewart
Phone: +44(0) 207 315 6225
Virginia Porter (US)
Phone: +1 646 735 4211
CABLE & WIRELESS: Tax Settlement Subject to Criticisms of MPs
-------------------------------------------------------------
Cable & Wireless's GBP380 million settlement of a GBP1.5 billion
tax dispute is under scrutiny from a powerful group of skeptical
MP.
On the basis that the settlement sum was low, the Treasury Select
Committee wanted to ask Sir Nicholas Montagu, chairman of the
Inland Revenue to explain the transaction.
Norman Lamb, the Liberal Democrat's shadow treasury minister, had
already sent a written query to Gordon Brown, the Chancellor and
to Sir Nicholas.
"I would like to know whether this is a done deal or whether we
can re-open the case," said Mr. Lamb.
"We need reassurance about this settlement in the light of the
GBP1.5 billion originally ring-fenced by the company to cover
it," he said.
Cable & Wireless was forced to put GBP1.5 billion in escrow to
cover potential liabilities arising from the sale of its mobile
business One2One to Deutsche Telekom in 1999. The clause to
provide the amount was triggered when the UK operator's debt was
cut to junk in December.
The agreement with the Revenue for a GBP380 million payment for
all of C&W's outstanding corporation tax liabilities for the 10
years up to end of March 2001 effectively included the
transaction.
"Such a wide discrepancy raises a lot of doubt about the ability
of the Revenue to clamp down on tax avoidance at a time when the
public finances are being stretched by the war in Iraq," Mr. Lamb
said.
CONTACT: CABLE & WIRELESS
Investor Relations
Samantha Ashworth
Phone: +44(0) 207 315 4460
Caroline Stewart
Phone: +44(0) 207 315 6225
Virginia Porter
Phone: +(1) 646 735 4211
CORUS GROUP: Negotiates Takeover of Steel Assets With LNM
---------------------------------------------------------
Negotiations over the sale of some or all of Corus Group's
steelmaking assets have been started with Indian entrepreneur
Lakshmi Mittal. The move is part of the troubled Anglo-Dutch
steelmaker's effort to stem heavy losses.
A deal involving LMN, the fast-growing steel group owned and run
by Mr Mittal, is among several possibilities being explored by
Corus, the Financial Times said.
There are two valid options for LNM. It could take over one or
more of Corus's most efficient plants, which would almost
certainly involve its Netherland factory, or choose the sites in
Teesside and Scunthorpe, northern England.
The factories in northern England specialize in steel sections
for the building industry -- a field in which LNM is keen to
expand.
For LNM, which has grown in the past decade by taking over under-
performing steel assets and injecting a new management approach,
taking control of a large part of Corus's assets is not an
entirely different business.
It is known that LNM will make about 34 million tons of steel
this year, making it the world's second biggest steel producer
after Arcelor. However, the company has only a small share of
the steel business in the UK, despite its strong market position
in continental Europe, the U.S. and parts of Asia.
Corus and LNM declined commenting on the discussions, although
Corus chairman Sir Brian Moffat has reportedly talked informally
with Mr. Mittal about options in recent weeks, according to the
report.
A going concern on the possible involvement of LNM with running
Corus plants, however, is that it could raise political
controversies, the report said.
Mr. Mittal was involved in a row with British prime minister Tony
Blair last year over the acquisition of a Romanian-owned steel
company, which the U.K. government lobbied for the company at the
same time when Mr. Mittal gave GBP125,000 to Mr. Blair's Labor
party.
Mr. Mittal has always maintained that there was no connection
between the two events.
Corus posted a pre-tax loss of GBP404m (US$441.5m) last year and
recorded operating loss of GBP141 million.
It abandoned the sale of an aluminum subsidiary, which was
crucial to the steelmaker to revive its business, because of
opposition by Corus's Netherlands-based supervisory board.
The Anglo-Dutch steel company is also currently in talks with 17
banks about an extension to its GBP1.2 billion-syndicated loan.
CONTACT: CORUS GROUP
Corporate Relations
Phone: +44 (0) 20 7717 4502/4505
Corus Investor Relations
Phone: +44 (0) 20 7717 4503/4504
Credit Suisse First Boston
Stuart Upcraft/Hugh Richards
Phone: +44 (0) 20 7888 8888
PIZZAEXPRESS: Venice Bidder Clears Issue Regarding Offer
--------------------------------------------------------
Offer Update
The Board of Venice Bidder notes the continued press speculation
concerning a possible bid from TDR Capital LLP and Capricorn
Ventures International Limited (together 'TDR/Capricorn').
Venice Bidder wishes to point out that its recommended offer,
which was announced over one month ago, continues to be the only
bid capable of acceptance by PizzaExpress Shareholders.
The Offer Document, dated February 27, 2003, contained a current
trading statement by PizzaExpress, reproduced below:
'The interim results noted that, since the half year, trading
conditions and like-for-like sales had not improved in the core
U.K. pizza operation and that immediate prospects remained
uncertain. Intense competition, coupled with well documented
economic and political factors, continue to delay improvements in
performance; indeed, sales in the core PizzaExpress business have
further weakened in recent weeks.'
The Board of Venice Bidder believes that this weakening noted by
the company, together with the further deterioration in consumer
confidence and the continuing highly competitive trading
environment, means that PizzaExpress Shareholders would benefit
from clarification as to both the company's current trading and
prospects and, in light of this position, the intentions of TDR/
Capricorn.
Certain terms used in this announcement are defined in the Offer
Document dated February 27, 2003.
Hawkpoint, which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Venice
Bidder and no one else in connection with the Offer and will not
be responsible to anyone other than Venice Bidder for providing
the protections afforded to its customers or for providing advice
in relation to the Offer or in relation to the contents of this
announcement or any transaction or arrangement referred to
herein.
ABN AMRO Hoare Govett is acting as broker for Venice Bidder and
is not acting for anyone else in connection with the Offer and
will not be responsible to anyone else other than Venice Bidder
for providing the protections afforded to its customers or for
providing advice in relation to the Offer.
CONTACT: VENICE BIDDER
Phone: 020 7499 5311
Luke Johnson
Ian Eldridge
ABN AMRO CAPITAL
Phone: 020 7678 0076
Ian Taylor
HAWKPOINT
Phone: 020 7665 4500
(Financial adviser to Venice Bidder)
Patrick Wilson
Robin Caiger
ABN AMRO Hoare Govett
Phone: 020 7678 8000
(Broker to Venice Bidder)
Chris Zeal
John MacGowan
FINANCIAL DYNAMICS
Phone: 020 7831 3113
(PR adviser to Venice Bidder)
Fergus Wheeler
ROYAL MAIL: Rise for Basic Postage Effective Starting May 8
-----------------------------------------------------------
First and Second class basic postage prices will rise by 1p on
Thursday, May 8, Royal Mail confirmed today.
The basic First Class stamp will rise to 28p and basic Second
Class postage increases to 20p.
It will be the first increase in the basic First Class stamp
since April 2000. The basic 19p Second Class stamp is currently
at the same price as it was at the end of 1993.
Royal Mail had earlier this month said May 8 was the intended
date for price rises to take effect. However, confirmation of the
date has had to await today's announcement from the postal
regulator, Postcomm, on its three-year price control for Royal
Mail.
Jerry Cope, Royal Mail's Managing Director UK, said: "These price
rises are modest. Basic First or Second class stamps carry mail
to the UK's 27 million addresses and a Royal Mail stamp is one of
the best value things money can buy. Royal Mail's prices have not
kept pace with inflation in recent years and even with these
increases, postage prices in the U.K. will still be among the
very lowest in the EU."
*****
Basic First and Second Class postage covers letters weighing up
to 60g. In addition to the 1p rise in basic postage prices, there
will be increases for heavier items of First and Second class
mail, and increases to a range of other services, including
International mail, Special Delivery and Standard Parcels.
The price rise is expected to generate an additional o170 million
of revenue for Royal Mail in a full year. The company is
currently losing some GBP1 million a day and in the 2001/2002
financial year, it lost GBP318 million on its day-to-day
operations.
ROOM SERVICE: Strikes Deal With Creditors, Resumes Trading
----------------------------------------------------------
The company announced its interim results for the six month
period ended June 30, 2002, on March 12, 2003. At that time, the
directors stated that they were in advanced negotiations
regarding a possible take-over and were seeking to clarify the
company's financial position.
The company now announces that the negotiations previously
disclosed regarding a possible take-over have been terminated.
The Board continues to seek a suitable acquisition and hopes to
be able to report progress in the near future.
Furthermore, the company has concluded negotiations with its
creditors and reached agreement with them in respect of their
claims.
The company's creditors are owed, in aggregate, GBP216,312.35.
Hanover Capital Group PLC, a company whose shares are traded on
the Alternative Investment Market, ('Hanover') has agreed to
assume these debts and has agreed terms with the creditors in
full and final settlement of their claims.
Following the assignment of the debts referred to above to
Hanover, the company will accordingly owe GBP216,312.35 to
Hanover and has agreed with Hanover to settle that indebtedness
in due course by an issue of ordinary shares in the capital of
the Company.
The company's financial position having been clarified, the
directors have requested that the company's shares resume trading
on AIM. Trading is expected to commence immediately.
ROOM SERVICE: Appoints John East & Partners as Adviser
------------------------------------------------------
Room Service Group Plc said it has appointed John East & Partners
Limited as the company's Nominated Adviser and Christows Limited
as the company's Broker, with immediate effect.
In January, the board of Room Service Plc placed its principal
trading subsidiary, Room Service Limited in voluntary
liquidation. David Rubin and Paul Appleton of David Rubin &
Partners were appointed as liquidators by the shareholder of Room
Service (UK) Limited.
On its announcement of the decision, the company said: "The
Directors of the company have been actively seeking additional
funding for the company from a number of sources over the past
four months. However, the various discussions that the company
has been involved in have not resulted in the deal anticipated by
the Directors of Room Service."
The company blamed volatile conditions in the stock market for
the downturn in the company's food delivery and catering
businesses.
CONTACT: JOHN EAST OR DAVID WORLIDGE
Crystal Gate, 28-30 Worship Street,
London EC2A 2AH
Phone: 020 7628 2200
or
0700 4 ADVICE
Fax: 020 7628 4473
E-mail: john.east@johneastpartners.com
david.worlidge@johneastpartners.com
THISTLE HOTELS: BIL Clarifies Position Regarding Cash Offer
-----------------------------------------------------------
Following the announcement by Thistle on March 31, 2003
confirming discussions with certain unnamed parties who may or
may not be considering either a possible competing offer for
Thistle or the acquisition of certain of Thistle's hotel assets,
BIL wishes to clarify its position.
The BIL Group currently owns Thistle Shares representing
approximately 45.8 per cent. of Thistle's existing issued share
capital.
In its Offer Document, BIL states that the BIL Group will not
dispose of its shareholding in Thistle, even if a competing offer
were made. For the avoidance of doubt, the BIL Group confirms
that it will not accept any competing offer in respect of its
Thistle Shares, regardless of the terms of such offer.
In addition, the BIL Group will not dispose of shareholding in
Thistle for a period of at least 12 months. This means that, even
if its Offer lapses, for a period of at least 12 months, the BIL
Group will not accept any offer in respect of its Thistle Shares
that may be made in that period, regardless of the terms of such
offer.
Under the City Code on Takeovers and Mergers, the Independent
Directors of Thistle may not, during the Offer Period, sell or
dispose of or agree to sell or dispose of assets of a material
amount without the approval of shareholders in general meeting.
Such approval requires a simple majority of the votes cast by
those shareholders present (in person or by proxy) and voting at
the meeting.
CONTACT: BIL
Arun Amarsi
Phone: +65 6228 1427
HSBC
Neil Goldie-Scot
Phone: +44 (0)20 7991 8888
Jan Sanders
Marcus Ayre
Brunswick
Jonathan Glass
Phone: +44 (0)20 7404 5959
Simon Sporborg
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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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