/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030423.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 Wednesday, April 23, 2003, Vol. 4, No. 79 Headlines B E L G I U M LERNOUT & HAUSPIE: Judge Okays Committee's Disclosure Statement F R A N C E RHODIA SA: Chairman Criticizes Efforts to Remove Him from Post VIVENDI UNIVERSAL: Minister 'Concerned' Over Music Arm Sale G E R M A N Y ALLIANZ AG: Drops Plan to Acquire Korean Insurance Company AXEL SPRINGER: To Close Die Welt if Govt Allows Rivals to Merge BAYER AG: Pays US$255 MM for Case Relating to Medicaid Program DEUTSCHE BAHN: Frankfurt Court Blocked Planned Demonstration DEUTSCHE BAHN: Faces Multi-million-dollar Claim for 1998 Crash DOPPSTADT GMBH: Assets Offered for Complete or Partial Purchase HVB GROUP: Proposes Sale of Unprofitable Real Estate Unit I T A L Y TELECOM ITALIA: Wants Binding Offers to be in By Late-May L U X E M B O U R G GETRONICS N.V.: Raises EUR 315 MM Cash Proceeds for HR Solutions P O L A N D BAYERISCHE HYPOVEREINSBANK: Mulls Float of Polish Bank Stake NETIA HOLDINGS: Newly Acquired Affiliate Cuts Workforce R U S S I A MOSKVICH: Moscow Files Involuntary Bankruptcy Petition S W I T Z E R L A N D CREDIT SUISSE: Chairman Denies Investment Bank Spin-off Rumors CREDIT SUISSE: Fitch Ratings Affirms CSFB 2001-TFL1 SWISS INTERNATIONAL: Deeper Scale Back Needed Say Analysts ZURICH FINANCIAL: Reviews Options Business Interest in Sri Lanka U N I T E D K I N G D O M AES DRAX: Creditors Seek Rival Companies' Help in Rescue Plan AUSTIN REED: Owner of Jaeger May Post Bid Along with Two Others BRITISH AIRWAYS: Negotiates Possible Return to Baghdad CENARGO INTERNATIONAL: Five Bidders Eye Tees Valley Depot GLAXOSMITHKLINE PLC: Amended Glaxo AZT Patent Case Filed in U.S. GLAXOSMITHKLINE PLC: Shareholders Object to Remuneration Pay INFINEON TECHNOLOGIES: Losses Likely to Continue in 2nd Quarter INVENSYS PLC: Pension Shortfall Threatens to Turn Firm Belly-up ROOSECOTE POWER: Bought Out of Administration by Centrica SOMERFIELD: Businessmen Offer to Buy Firm for Half its Value SSL INTERNATIONAL: HgCapital Joins Bid for Medical Division - - - - - - - - ============= B E L G I U M ============= LERNOUT & HAUSPIE: Judge Okays Committee's Disclosure Statement --------------------------------------------------------------- After continuing the hearing on the Disclosure Statement presented by the Official Unsecured Creditors' Committee (in the bankruptcy cases involving Lernout & Hauspie Speech Products N.V.) to give the parties an opportunity to confer, Judge Wizmur resumed the hearing on April 10 and issued her ruling approving the Committee's Disclosure Statement and setting the confirmation process in motion. To the extent there were objections to the adequacy of the information in the Disclosure Statement remaining after announcements of withdrawal made on the record, Judge Wizmur overrules them. Judge Wizmur sets the hearing on confirmation of the Committee's Plan for May 29, 2003 and the deadline for objections to confirmation of the Plan for May 19, 2003. Judge Wizmur directs that the holder of any proof of claim to which there is a pending objection filed on or before April 21, 2003, must file a motion under Rule 3018 of the Federal Rules of Bankruptcy Procedure on or before May 5, 2003, to have the claim temporarily allowed for voting purposes. The hearing for consideration of any Rule 3018 motions is set for May 9, 2003. The Committee notifies all parties through service of notice of the entry of the order approving the Disclosure Statement that it objects, solely for voting purposes, to any Class 3 Claim that is: (1) in an unliquidated amount; and (2) purports to be disputed or contingent and (3) that has not been previously the subject of an objection. In the event that any holder of an objectionable claim brings a motion seeking temporary allowance Rule 3018, the ballot cast with respect to that claim will be counted in determining whether the numerosity requirement of the Bankruptcy Code has been satisfied, but will not be counted in determining whether the aggregate dollar amount requirement of the Code has been satisfied. Judge Wizmur accepts the Committee's recommendation of a record date of March 14, 2003, for determining those holders of Claims entitled to receive a Solicitation Package and which are entitled to vote on the acceptance or rejection of the Plan. (L&H/Dictaphone Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) =========== F R A N C E =========== RHODIA SA: Chairman Criticizes Efforts to Remove Him from Post -------------------------------------------------------------- The chairman and chief executive of Rhodia labeled minority shareholders who want to oust him in the chemical manufacturing company as "greenmailers" trying to destabilize the group for short-term financial gain, according to the Financial Times. Mr. Jean-Pierre Tirouflet also hit the group in their plan to break up the group through disposals, saying: "They would be like a bull in a china shop, smashing up everything." Belgian investor Hughes de Lasteyrie du Saillant is leading the group of shareholders in motioning for Mr. Tirouflet's departure. He accused the latter of rejecting bids for assets without consultation. Shareholders are scheduled to vote on his resolution to remove Mr. Tirouflet from the board in Rhodia's annual meeting next Tuesday. Mr. Lasteyrie, who owns 2.5% of Rhodia stock, told the Financial Times he would "not rest until Tirouflet is gone." Minority shareholders were given another straw of hope last week after Aventis announced plans to sell a 9.9% stake in Rhodia to French bank Credit Lyonnais. The transaction left Aventis with only 15.3% stake in its former chemicals subsidiary, and possibly a lesser voting rights to support Mr. Tirouflet. The shareholders are hoping the voting rights for Aventis' stake will be transferred to Lyonnais before the annual general meeting. But the deal is unlikely to help the group at all since the deadline of the Aventis-Lyonnais deal is beyond the schedule of the annual meeting, and even if the sale closes before the vote, Lyonnais is still unlikely to support any move that would expose it to any fall in Rhodia shares. Lyonnais stands to become Rhodia's second-largest shareholder in the transaction. VIVENDI UNIVERSAL: Minister 'Concerned' Over Music Arm Sale ----------------------------------------------------------- The rumored sale of Universal Music, the record arm of Vivendi Universal, has reportedly caught the attention of French Culture Minister Jean-Jacques Aillagon, who has allegedly urged the company to proceed prudently. According to AFX News, the minister in recent weeks had both written and telephoned Vivendi Chairman Jean-Rene Fourtou to express his concern about the sale. The ministry would not provide a copy of the letter nor reveal Mr. Aillagon's concern. "It's obviously an important matter, and the minister was demonstrating that he is following it closely," a culture ministry official, on condition of anonymity, told AFX News. A separate report by Les Echos quoted another anonymous ministry source as saying: "The minister wrote the letter to express his vigilance and his desire to be kept informed on the progress of Universal Music, given the company's cultural importance for French creativity and the promotion of our heritage." According to Les Echos, Mr. Aillagon had stressed in his letter that the sell-off should not follow purely financial imperatives, but should be part of "a true strategic vision." Apple Computer Inc. is reportedly on the verge of making an offer for the music group. ============= G E R M A N Y ============= ALLIANZ AG: Drops Plan to Acquire Korean Insurance Company ---------------------------------------------------------- Allianz AG abandoned plans to acquire South Korea's smallest casualty insurer, Green Fire Marine Insuance Co., according to Korea Economic Daily. According to the report, a Green Fire official said Europe's largest insurer dropped the plan after it was advised of the "instability" of the region's financial market. The insurance company's operating performance deteriorated significantly over the past two year. The group posted a bottom- line loss of EUR1.2 billion, mainly due to operating losses at Dresdner Bank of EUR2.0 billion. Allianz offers a range of insurance products and services through some 100 subsidiaries and affiliates, including life, health, and property & casualty. Other businesses include risk consulting and public investment funds. CONTACT: ALLIANZ AG Koniginstrasse 28 D-80802 Munich, Germany Phone: +49-89-38-00-00 Fax: +49-89-34-99-41 Home Page: http://www.allianz.com Contact: Paul Achleitner Member of the Management Board (Finance) AXEL SPRINGER: To Close Die Welt if Govt Allows Rivals to Merge --------------------------------------------------------------- Die Welt, Germany's leading newspaper publisher, is threatening to go out of circulation if two rivals are allowed to merge, BBC News reported yesterday. Hobbled by falling sales and circulation, the publisher said efforts to stabilize its financial footing will be affected if Holtzbrinck, the publisher of Tagesspiegel, will be allowed to gobble up the Berliner Zeitung. The merger was actually announced in June last year, but German regulators disallowed it. Now, Holtzbrinck is threatening to close Tagesspiegel if the proposal is turned down anew. In recent months, Die Welt's advertising revenues have dropped sharply, even after parent company, Axel Springer Verlag, merged it with regional paper, Berliner Morgenpost, last year. Another Axel Springer newspaper, Bild -- Germany's best-selling newspaper -- has also seen sales dropped below the psychologically important four-million-mark. BBC says the threat to close down Die Welt was contained in a letter to Economy Minister Wolfgang Clement from Springer's CEO Mathias Doepfner. Weekly newspaper, Der Spiegel, first revealed the existence of the letter. It claimed that Die Welt's sales fell 10% during the first quarter in comparison with the year-ago results. BAYER AG: Pays US$255 MM for Case Relating to Medicaid Program -------------------------------------------------------------- Pharmaceutical company Bayer AG agreed to settle its involvement in a case relating to the Medicaid program by paying US$255.6 million, and agreeing to participate in a corporate integrity program. The amount includes US$5.6 million in fines for failing to disclose its production of antibiotic Cipro, and US$250 million in civil penalties. Bayer, and another drug company, GlaxoSmithKline were both accused of relabeling drugs sold to a private health insurer to conceal the fact that the prices quoted to the insurer were considerably lower than those charged the federal medical program for the poor. "Misconduct in the pharmaceutical industry negatively impacts state and federal treasuries, and robs our citizens and taxpayers of important and necessary resources," Michael Sullivan, US attorney for the state of Massachusetts, said in a statement. The German company pleaded guilty to a criminal charge for failing to report the production of the antibiotic Cipro under a private label for the health insurer, Kaiser Permanente. In a statement, Bayer said it believed its marketing practices "were responsible and conducted in good faith". DEUTSCHE BAHN: Frankfurt Court Blocked Planned Demonstration ------------------------------------------------------------ The planned strike of Deutsche Banh conductors and engineers was averted after a Frankfurt court blocked the move against the German state-owned railway. Deutsche Bahn says members of the Gewerkschaft Deutscher Lokomotivfuehrer union called for strikes because the railway refused to sign a separate agreement. They were supposed to demonstrate in two regions starting Tuesday, according to Bild am Sonntag. The court decision, however, did not make clear whether the separate agreement will go ahead. The report cited engineering-union head Manfred Schell saying workers will consider strikes if talks with Deutsch Bahn and Chief Executive Hartmut Mehdorn don't start at the beginning of May. Mr. Schell held Deutsche Bahn's managers responsible for the company's "difficult" financial situation. He recommended a change in the company's controversial new pricing system. Deutsche Bahn countered the attacks saying the union is using labor talks as a way of gaining more political leverage over larger unions, according to the report. DEUTSCHE BAHN: Faces Multi-million-dollar Claim for 1998 Crash -------------------------------------------------------------- An American lawyer is demanding between US$2 million and US$4 million in compensation for each of the 100-200 individuals who survived a train crash in 1998 in Germany, Bloomberg said over the weekend. Edward Fagan -- known for negotiating a US$1.25 billion settlement from UBS AG and Credit Suisse Group for holocaust victims -- directed his claim for compensation to German national railway operator, Deutsche Bahn AG. He also wants ABB Ltd., Siemens and ThyssenKrupp AG -- the companies that made and market the trains that crashed -- to contribute. Negotiations will reportedly start next month. The crash, now a subject of a class action suit in New York, claimed 105 lives, according to Bloomberg, and maimed 101. More than a hundred survivors are involved in the U.S. lawsuit. So far, Deutsche Bahn has paid victims more than EUR25 million. "If Deutsche Bahn... continues to refuse to recognize the legitimate demands of the victims, we'll see them in court. Then they'll have to pay billions," Mr. Fagan said. DOPPSTADT GMBH: Assets Offered for Complete or Partial Purchase --------------------------------------------------------------- Asset-Sale Doppstadt GmbH, Schonebeck, Germany -Appeal to prospective buyers- On orders of the insolvency manager we offer the assets of the company Doppstadt GmbH for sale. A binding offer is possible for a complete or partial purchase. Doppstadt GmbH, Schonebeck, is based in Germany (Sachsen-Anhalt) near the city of Magdeburg. The plant is located traffic favorably near the motorways A 14 and A 2. The modern vehicle plant produces all-wheel drive tractors for multi-operation-use with an engine performance range from 80 to 200 hp. Additional production includes self-propelled forage harvesters, mounted implements and components/modules. The size of the plant is est. 60.00 square meters. An est. 300 people are employed. Within the insolvency procedure the assets (no liabilities) are waiting to be sold. Current values: -- fixed assets est. EUR 4 Mio -- manufactured products est. EUR 5 Mio -- incomplete products est. EUR 2 Mio -- raw materials est. EUR 7 Mio -- landed property est. EUR 10 Mio Additional information available at the Internet: http://www.ht- kg.de. A short expose can be posted on request. An inspection of the plant and an insight into business documents at the Data- Room in Schonebeck is possible by appointment. The binding offer period ends May 25th 2003. CONTACT: HT HANSEATISCHE INDUSTRIE- CONSULT HOLGER HAUN & TOM THOMSEN KG Duvenstedter Damm 24-26 22397 Hamburg, Germany Phone: 0049 / 40 / 525 60 50 Fax: 0049 / 40 / 525 60 525 HVB GROUP: Proposes Sale of Unprofitable Real Estate Unit --------------------------------------------------------- HVB Group AG included in its invitation to its annual general meeting on May 14 a plan to spin-off its real estate unit Hypo Real Estate Holding AG. According to the Group, Hypo Real is expected to be unprofitable until 2005. It is spinning off the business in order to move EUR57 billion of risk-weighted assets off its books, in turn injecting EUR1.7 billion in order to make the business financially fit enough to compete with rivals. In an offer to minority shareholders, the Group indicated that Hypo Real will post an operating loss of EUR17 million this year, a loss of EUR126 million in 2004, and an unidentified loss in 2005. Real estate provisions will rise to EUR620 million in 2003 from 2002's EUR384 million, of which EUR460 million will be taken on by HVB. The EUR590 million real estate bank's risks for 2003 and 2004 will also be taken by HVB Group. Moreover, investment bank JP Morgan has been appointed by HVB to find a buyer for its 75.1%-owned Vereins-und Westbank AG unit. Hamburger Sparkasse (Haspa) has been contacted by JP Morgan. CONTACT: HVG GROUP Presseabteilung Am Tucherpark 16 80538 Munchen Phone: (089) 378-2 58 01/-2 55 12 Fax: (089) 378-2 56 99 Dr. Knut Hansen Phone: 089/378-24644 E-mail: knut.hansen@hvbgroup.com ========= I T A L Y ========= TELECOM ITALIA: Wants Binding Offers to be in By Late-May --------------------------------------------------------- Bidders for Seat-Pagine Gialle SpA, the directories business of Telecom Italia SpA, must present binding offers by the second half of May to be included in the shortlist of preferred buyers, AFX News says, citing local daily, Il Sole 24 Ore. At present, there are four consortia conducting due diligence on the business, says the newswire, adding that Telecom Italia advisors are expected to shortlist only two buyers. The four are offering at least EUR5 billion for the unit, but the newswire believes the final price will not exceed EUR5.5 billion. Telecom Italia, which controls 56.6% of Seat PG, would get EUR3.1 billion of the proceeds. Other than its flagship directories business, Seat PG also operates an Internet and television service. Telecom Italia originally planned to spin off the Internet and television operations into a new company called Telecom Italia Media. =================== L U X E M B O U R G =================== GETRONICS N.V.: Raises EUR 315 MM Cash Proceeds for HR Solutions ---------------------------------------------------------------- Getronics and NIB Capital Private Equity have reached agreement on the sale and purchase of Getronics Human Resources Solutions BV (GHRS) for circa EUR 315 million cash proceeds, resulting in a book profit of circa EUR 270 million. The transaction is still subject to certain conditions and the customary regulatory procedures are in process. As part of the review of its assets and as previously announced, the Company concluded that the Human Resources Solutions business unit was non-core. GHRS will have more freedom to develop outside of Getronics and its strategic position will be enhanced by its new partner. The Company welcomes NIB Capital Private Equity as the new shareholder for GHRS, which will ensure continuity and prosperity for GHRS, its employees and its customers. "We are very satisfied with the swift and competitive sale process and the resulting cash proceeds" says Klaas Wagenaar, Vice-Chairman, "the sale of GHRS is a milestone in the realisation of the entrepreneurial solution, which enables us to accomplish a solid financial arrangement with the trustee and bondholders". ABN AMRO Corporate Finance has acted as financial advisor and Greenberg Traurig has acted as legal advisor to Getronics in respect of the divestment of GHRS. About Getronics With approximately 25,000 employees in over 30 countries, Getronics is one of the world's leading providers of vendor independent solutions and services to professional users of Information and Communication Technology (ICT). Through consulting, integrating, implementing and managing Infrastructure Solutions and Business Solutions, Getronics helps many of the world's largest global and local organisations to maximise the value of their technology investment and improve interaction with their customers. Getronics' headquarters is in Amsterdam, with regional head offices in Boston and Singapore. Getronics' shares are traded on Euronext Amsterdam ('GTN'). For further information about Getronics, visit www.getronics.com About NIB Capital NIB Capital Private Equity is one of the largest private equity investors in the world, with more than EUR 14.1 billion of assets under management. NIB Capital Private Equity invests directly in companies. In the Benelux countries and Germany, NIB Capital Private Equity acts as lead investor, and elsewhere in Europe and the United States it co-invests alongside other private equity funds acting as lead investors. In addition, NIB Capital Private Equity invests approximately 80% of these funds in private equity funds (either directly or through secondary transactions). NIB Capital Private Equity also manages a mezzanine fund in the United States. NIB Capital Private Equity has approximately 55 investment professionals based in Amsterdam, Antwerp, Frankfurt and New York. NIB Capital Private Equity is funded by her two founding shareholders ABP and PGGM, being two of the largest pension funds in the world, with assets under management of EUR 135.5 billion and EUR 45.3 billion, respectively, as at December 31, 2002. About Getronics HR Solutions Getronics HR Solutions is the leading payroll processor in the Netherlands with an output of 2 million salary slips per month. In addition to payroll processing GHRS is also active in development of software for HR-departments, HR consultancy and insourcing of personnel- and salary administration. There are 650 people employed who together service 4,200 companies and organisations, in both the private and non-profit sector. Through its partners the number of clients is even larger. The clients of GHRS can be found in the healthcare, public and private sector, and include UWV, Amsterdam municipality, TPG and ABN AMRO. CONTACT: GETRONICS N.V. Investor enquiries Phone: +31 20 586 1964 Fax: +31 20 586 1455 E-mail: investor.relations@getronics.com NIB CAPITAL PRIVATE EQUITY Alexander van Wassenaer, Partner Buyouts Phone: +31 20 540 7533 Fax: +31 20 540 7501 Mobile: +31 654 674 695 E-mail: alexander.van.wassenaer@NIBcapital.com GETRONICS HR SOLUTIONS Theo Willemsen, CEO Getronics HR Solutions BV Phone: +31 33 450 6679 Fax: +31 33 450 6693 =========== P O L A N D =========== BAYERISCHE HYPOVEREINSBANK: Mulls Float of Polish Bank Stake ------------------------------------------------------------ German banking group, Bayerische HypoVereinsbank, is planning to float a portion of its stake in Bank Austria Creditanstalt, says the Warsaw Business Journal. Accordingly, the German bank has been in talks with Polish investors over this matter and, in fact, it has already sent representatives to meet with officials of the Warsaw Stock Exchange and the Securities and Stock Exchange Commission. The paper says there are no legal obstacles to listing the German bank's 25% stake. HVB is also not new to the Warsaw bourse, which lists BPH-PBK, the third largest domestic bank in Poland in terms of net assets. HVB controls 71% of this bank. The planned float is believed to be part of HVB's efforts to raise between EUR860 million and EUR1.14 billion in order to avoid a rating downgrade. The company is coming off a year that saw it record EUR829 million loss. NETIA HOLDINGS: Newly Acquired Affiliate Cuts Workforce ------------------------------------------------------- TDC Internet Polska (TDC IP), the newly acquired unit of Netia Holdings, has reportedly cancelled trade union employment contracts a week after Netia bought it for EUR1,000. Netia Spokeswoman Jolanta Ciesielska told Rzeczpospolita the move is just part of the group-wide employment reduction program. In addition, the lay off was announced even before Netia took over the company. The Warsaw Business Journal has learned that the previous management had in fact informed the labor office about laying off 100 of its 260 existing workers. Ms. Ciesielska says Netia will consolidate the seven companies constituting TDC IP. It will eventually come under the umbrella of Netia Telekom, a new company that will be set up to manage all of its telecom and Internet services. Meanwhile, Netia has appointed Waldemar Opalka to head TDC IP. =========== R U S S I A =========== MOSKVICH: Moscow Files Involuntary Bankruptcy Petition ------------------------------------------------------ The city of Moscow has initiated bankruptcy proceedings against idle car factory, Moskvich, the first step to reviving the company now dormant for 15 months, says The Moscow Times. The paper says the firm, which last produced 800 cars in 2001, has total debts of 33 billion rubles (US$1.1 billion), the bulk of which is owed to the Finance Ministry in the form of hard currency, while the rest are tax arrears to the city and federal governments. The company also has unpaid Mosenergo bills. Just before ceasing operations, the company reported losses of 9.6 billion rubles. The Agency for Restructuring of Credit Organizations (ARCO), which reports to the Central Bank, will manage the bankruptcy procedure currently lodged with the Moscow Arbitration Court. The move gained plaudits from the financial sector. United Financial Group Analyst Yelena Sakhnova said City Hall and ARCO were right to see an urgent need to return the Moskvich site to productivity. "Moskvich never proved itself after the 1998 financial meltdown and has not functioned normally for the past three years. It is high time to decide what to do with this factory and its land -- either produce cars or hand over the land for construction of houses or similar projects," she said. ARCO head, Tatyana Trefilova, said she hopes the restructuring would make the company more attractive to investors who could reinvigorate the plant. "We must not simply sell off Moskvich in pieces, but conduct the bankruptcy in such a way that we create the conditions for the emergence of a new auto enterprise in Moscow. We will liquidate this legal entity and create a new one. Then investors will come," she said. She declined to name potential investors, saying negotiations are still in early stage. The Property Ministry owns a 60.36 percent stake in the company. The report did not indicate who owns the rest. ===================== S W I T Z E R L A N D ===================== CREDIT SUISSE: Chairman Denies Investment Bank Spin-off Rumors -------------------------------------------------------------- Credit Suisse chairman Walter Kielholz denied suggestions that the bank is selling or spinning off investment bank Credit Suisse First Boston, according to the Financial Times. The new chairman said in an interview: "The board has decided that investment banking is a business that we want to be in. Our Swiss retail operations and also the private bank are very large clients of CSFB." Buyers were eyeing Switzerland's biggest banks after a decline in equity markets eroded its capital base. Its Winterthur insurance operations and CSFB were the ones badly hit. Co-chief executive John Mack launched a cost cutting drive and curbed risk taking in the investment bank, but CSFB still has to show growth in revenues and achieve sustainable profitability. "It is clear that CSFB has to earn its keep, period," Mr Kielholz added. "There is no 'What if?' There is an enormous determination from John Mack to make this work even under dire circumstances." Mr. Kielholz also ruled out foreign or domestic takeover saying: "The independence of Credit Suisse is so closely tied with its core franchise of private banking that it would be extremely difficult in my view for a foreign institution to maintain the franchise." He also dismissed the possibility of a merger in whole or in part with rival UBS. Credit Suisse recorded its worst result in its 147-history by posting a net loss of CHF3.3 billion (US$1.5 billion) in 2002. It plans to cut another 1,250 jobs and slash dividend to counter weak markets. CREDIT SUISSE: Fitch Ratings Affirms CSFB 2001-TFL1 --------------------------------------------------- Credit Suisse First Boston (CSFB) Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-TFL1 $148.8 million class A-1, $484 million class A-2, $63 million class B, and interest only class A-X are affirmed at 'AAA' by Fitch Ratings. In addition, Fitch affirms the following classes: $33 million class C at 'AA+', $40 million class D at 'AA', $29 million class E at 'AA-', $43 million class F at 'A+', $49.7 million class G at 'A-', $6 million class H-GT at 'A', $9.5 million J-GT at 'A-', $20 million K-GT at 'BBB-', $7 million H- 230 at 'BBB+', $5.9 million J-230 at 'BBB', $10.6 million K-230 at 'BBB-', $6.7 million H-ALL at 'BBB+', $4.5 million J-ALL at 'BBB', $1.6 million H-CR at 'BBB+', $1.7 million J-CR at 'BBB', and $6.8 million class K-CR at 'BBB-'. The ratings for classes H- CON, J-CON, and K-CON were withdrawn due to the payoff of the Concordia loan. Fitch does not rate classes H-PAL and J-PAL. Although Fitch has some concerns with three loans (73.9%) regarding increased expenses and decreased occupancy, the resizing of the loans based on Fitch stressed constants and Fitch adjusted current net cash flow (NCF) is adequate to affirm the ratings at this time. As of the April 2003 distribution date, the Trust Mortgage Asset's (TMA) total principal balance has been reduced by 20.3% to $1.01 billion from $1.27 billion at origination due to the payoff of one of the original six loans in the pool. The trust's mortgage assets include both whole loans and senior participation interests (A note) in whole loans. The contributed portion is further split into a pooled portion and a non-pooled portion. The junior participation interest in a loan, if any, is not contributed to the trust. As part of its review, Fitch analyzed the performance of each loan and the underlying collateral and compared each loan's debt service coverage ratio (DSCR) at closing to the most recent trailing twelve month (TTM) available. DSCRs are based on a Fitch stressed NCF and a stressed debt service on the TMA loan balance. Fitch also considered in its analysis the additional stress of the junior participation interest and mezzanine financing, if any. The Palisades Mall loan, representing 43.4% of the TMA is collateralized by a super regional mall totaling 2.3 million square feet (SF) and located in West Nyack, New York. Fitch NCF for the year-ended (YE) Dec. 31, 2002 decreased by 21.8% from issuance. Two significant tenants, JC Penney Home and Rainforest Cafe have vacated since issuance. These tenants were replaced by Bob Stores and Cheesecake Factory for a majority of the space. The decline in NCF is due to downtime between re-tenanting and additional slippage in occupancy to 92% from 94% at issuance. The corresponding DSCR is 1.08 times (x) compared to 1.28x at issuance. The all-in current DSCR is 1.03x compare to 1.23x. Fitch will continue to monitor the leasing status of the mall. 230 Park Avenue (18.2%) is a mid-town Manhattan office building with 1.1 million sf. Although Fitch adjusted NCF has declined 4.3% since issuance, occupancy has increased to 91% as of Dec. 31, 2002 compared to 85.1%. The corresponding Fitch DSCR is 1.40x compared to 1.47x at issuance. The all-in current DSCR is 1.06x compared to 1.10x at issuance. Although expenses increased significantly, if the approximately $1.3 million of free rent that was reflected in the YE 2002 NCF, were added back, the NCF would be flat to issuance. Alliance Portfolio (12.3%) is a multifamily portfolio of 21 properties located in Dallas, TX and Phoenix, AZ. The overall occupancy of the portfolio has declined to 88% as of Dec. 31, 2002 compared to 93% at issuance. The YE 2002 Fitch adjusted NCF declined 12% since issuance primarily due to a substantial increase in underwritten expenses. The corresponding Fitch DSCR is 1.42x compared to 1.59x at issuance. The all-in current DSCR is 1.25x compared to 1.40x at issuance. Fitch will monitor the expenses and occupancy at the property. The remaining two loans have performed better than or as expected. The occupancy of Gas Company Tower (19.7%), an office building located in Los Angeles, CA, has improved to 95% as of Dec. 31, 2002 compared to 92.7% at issuance. The Fitch DSCR for YE 2002 is 1.87x compared to 1.60x at issuance. The all-in current DSCR is 1.31x compared to 1.12x at issuance. The occupancy of the Crocker Portfolio (6.4%) declined slightly to 81.3% as of March 2003 compared to 82% at issuance. The Fitch DSCR based on annualizing the year to date September 2002 net cash flow is 1.60x compared to 1.43x at issuance. Fitch will continue to monitor this transaction, as surveillance is ongoing. SWISS INTERNATIONAL: Deeper Scale Back Needed Say Analysts ---------------------------------------------------------- Analysts are recommending that Swiss International Air Lines step up its capacity cutting scheme to avoid running out of cash, according to Bloomberg. ``Swiss Air has to scale back massively if the company wants to survive,'' said Matthias Egger, an analyst at Pictet & Cie who has a ``reduce'' rating on the airline's stock. Swiss Air has been cutting 10% of its workforce since November, and removed 28 planes, but Mr. Egger deemed the measures "not enough.'' ``The company probably will have to halve in the next two years to be profitable,'' he said. He estimates the company's cash position at about CHF1 billion. Analysts have said the company may reduce the size of its long- haul fleet to fewer than 10 airplanes from 25 to counter a drop in passenger numbers, according to the report. Profitability in the company's regional fleet is being threatened by high fixed costs and competition from low-far carriers such as EasyJet Plc. The conflict in Iraq and concern about SARS, a deadly respiratory disease, are expected to drive the company towards a first quarter loss of as much as CHF310 million (US$225 million). The Swiss national carrier is also under pressure from its main creditors. SonntagsZeitung said UBS AG and Credit Suisse Group, which each own 10% of the carrier, refused to grant the airline a CHF500 million credit line unless Swiss Air provide a "satisfactory business plan." Swiss Air is due to present a new business plan at a shareholders meeting on May 6. The issue on the credit line ``sounds like an alarm sign and may be a prelude to withdrawal,'' said Richard Aboulafia, an analyst with the Teal Group, a consulting company in Virginia. Credit Suisse spokesman Siro Barino and UBS spokesman Plutarch Chiotopulos declined to comment on the report. Mr. Aboulafia also expressed:``It's very difficult to raise cash for smaller players like Swiss Air...We have an environment where things could fall pretty quickly.'' Swiss Air's shares plunged 84% this year, and its fourth-quarter loss tripled. The company's liabilities stood at CHF2.95 billion at the end of 2002, according to its balance sheet. `` Swiss government and companies including UBS and Nestle SA, control 91% of the company. ZURICH FINANCIAL: Reviews Options Business Interest in Sri Lanka ---------------------------------------------------------------- Zurich Financial Services announced Monday that it is conducting a strategic review of different options for its shareholding in Zurich NDB Finance Lanka (Private) Ltd. (ZNFL) in Sri Lanka. These options include possibly divesting its shareholding in ZNFL and thereby its controlling interest in Eagle Insurance Company Ltd (Eagle), as well as continuing current arrangements. Zurich has a 58.44% holding in Zurich NDB Finance Lanka (Private) Ltd. (ZNFL); ZNFL is a joint venture entity between Zurich and Capital Development and Investment Company Limited (a subsidiary of National Development Bank). In turn, ZFNL holds 87.27% of Eagle Insurance Company Ltd. (Eagle). Eagle is a composite insurance operation in Sri Lanka listed in the Colombo Stock Exchange. The strategic review is in line with Zurich's announcement last year to focus its activities on its core Life and Non-Life insurance business, and to re-deploy capital to its core markets. Since the review of options is at a preliminary stage, there can be no certainty as to its outcome. A further announcement will be made by Zurich if necessary. The Zurich Financial Services Group (www.zurich.com) provides its customers solutions in the areas of financial protection (non- life insurance and structured solutions) and asset gathering (life insurance and asset management). The Group focuses its activities on its key markets of North America, UK and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in more than 60 countries and employs approximately 70,000 people. CONTACT: ZURICH FINANCIAL SERVICES Public Relation 8022 Zurich, Switzerland Phone: +41 (0)1 625 21 00 Fax: +41 (0)1 625 26 41 Home Page: http://www.zurich.com =========================== U N I T E D K I N G D O M =========================== AES DRAX: Creditors Seek Rival Companies' Help in Rescue Plan ------------------------------------------------------------- Creditors of AES Drax have asked UK's principal power companies to participate in the company's restructuring plan, according to Times Online. Close Brothers, the merchant bank, and PricewaterhouseCoopers, the accountancy firm, made the appeal to industry rivals, banks and private equity companies, including Innogy, International Power, Powergen, London Electricity and ScottishPower. Drax's bondholders, represented by Close Brothers, are believed behind the approach. UK's largest power station proposes that the companies take an equity investment in Drax and provide trading services for the generator, to allow it to continue to participate in the wholesale electricity market. Innogy is understood to have offered to run the 3,000 MW power station for its owners, on a management contract offering a guaranteed revenue for a certain margin, according to the report. Drax ran into trouble after its largest customer, TXU Europe, fell casualty of a 40% drop in the price of wholesale electricity. It could have been forced into administration last year had its creditors refused to avert the plan on condition that Drax discussed restructuring plans. Drax owes about GBP800 million to a consortium of 53 banks and GBP400 million in bonds. But the standstill agreement put in place with the banks at the end of last year expires next month. Drax, therefore, must make sure a deal with the creditors is secured. Industry sources say the approach is being used to gain greater leverage for the creditors. "It is not clear if this is a serious approach, or just a stick to beat AES with," one industry source said. AUSTIN REED: Owner of Jaeger May Post Bid Along with Two Others --------------------------------------------------------------- Reports circulating the press have singled out that Harold Tillman is poised to "throw his hat into the ring" in the bid battle for upmarket clothing chain Austin Reed. Following the deadline of Thursday set by Austin Reed's advisers for bidders to submit formal written approaches for the company, Tillman is reportedly planning to reverse his Jaeger and Baird Menswear brands into the quoted menswear retailer. Under the proposed plan, Austin Reed would buy Tillman's Jaeger and Baird business and Tillman would take a big stake in Austin Reed in return. Tillman said: "I think it would be a shame from the shareholders' point of view not to take the opportunity of taking Austin Reed to a much larger branded group and develop the business through acquisitions." He also believes there is a "huge potential to put Jaeger into Austin Reed and Austin Reed into Jaeger". Richard Thompson, who bought and sold Jaeger earlier this year, and Nigel Robertson, the great-grandson of Austin Reed's eponymous founder, are also considering making offers. The business could fetch north of GBP50 million, according to City sources, although a detailed review of its entire operations by senior executives indicates to include both selling it whole or only a part of it. Paul Slater, managing director of the Glasgow retailer, is reported to be seeking a board recommendation before proceeding with a bid. Austin Reed has enjoyed popularity among 20th century celebrities until business began to slow down, leading to full-year pre-tax profits that were down from GB8.95 million to a lowly GBP7.52 million in line with forecasts. BRITISH AIRWAYS: Negotiates Possible Return to Baghdad ------------------------------------------------------ British Airways is in talks with the UK government to resume scheduled flights from London to Baghdad following a 13-year gap. The airline served Iraq for more than 60 years until the last Gulf War. British Airways' Chief Executive Rod Eddington said: "We have been in discussions with the UK government for some time about relief flights and resuming scheduled services. We have a long history of flying to Iraq and are keen to re-establish regular services as soon as political stability and security return to the country. "We have the rights to fly to Iraq and we are now awaiting confirmation from the British government that it is safe to return." British Airways plans to operate a Boeing 767 aircraft three times a week from London Heathrow to Baghdad, which would bring the number of its services to Middle East destinations to 13 in 10 countries. The airline flies to more destinations in the Middle East than any other European carrier. CENARGO INTERNATIONAL: Five Bidders Eye Tees Valley Depot --------------------------------------------------------- Ernst & Young, the administrator of Cenargo International Plc, has reportedly receive five offers for the Eaglescliffe Logistics Centre, a subsidiary operating in Tees Valley, the Evening Gazette says. One of the offers, according to the report, was made by Tees Valley Development Company (TVDC), a local management firm. Another offer is believed to have come from a team that once worked for Cenargo. TVDC Neil Etherington, in an interview with the Evening Gazette, said: "Under the current management structure at Eaglescliffe, the company has made massive steps forward since acquiring the site from the Ministry of Defense in the late '90s. "The 600-plus people who work there is about the same figure as when the Ministry had the site. The local team has a strong track record based on real achievement and has become an established and important part of the Tees Valley logistics package." It is not known if the rumored plan to convert the 114-acre depot into a housing project was among those submitted to Ernst & Young. "We hope and anticipate that the administrator will appreciate this is not just about cash but also real jobs and real activity. To sell the site speculatively for long-term residential development and ignore what is happening now on the ground would be a travesty," Mr. Etherington told the Gazette. Cenargo filed for Chapter 11 bankruptcy in the United States last January after failing to meet a GBP5.3 million payment on a GBP110 million junk bond issue. The depot in Tees Valley is considered the company's largest in the UK. It boasts of the latest container handling and storage systems, technology and equipment and provides Customs & Excise bonded warehousing. It is approved as an inland clearance depot, the paper says. Cenargo employs 200 people on the site, with approximately another 400 by tenants that include online directory AskAlix and Virgin Cosmetics, among others. The company snatched the site after the Ministry of Defense closed it in 1997. Renamed into Eaglescliffe Logistics Centre, the site has become a hub for warehousing and distribution. A decision on the offers is expected by end of next month, the paper says. GLAXOSMITHKLINE PLC: Amended Glaxo AZT Patent Case Filed in U.S. ---------------------------------------------------------- - AIDS Healthcare Foundation amends complaint for patent piracy against British drug giant in U.S. Federal Court (Central District, California) AIDS Healthcare Foundation (AHF) on Monday has filed an amended federal patent piracy case in United States Federal Court for Central District of California (Western Division) against British drug giant GlaxoSmithKline plc (GSK) over the patent for AZT, the first AIDS drug, and other subsequent derivative AIDS drugs. AHF's initial complaint had been dismissed in March 2003, "without prejudice," allowing the nation's largest AIDS organisation to amend and re-file its action against GSK. "Despite GlaxoSmithKline's attempts to dismiss our lawsuit as 'frivolous' our complaint is very serious, indeed," said Michael Weinstein, AIDS Healthcare Foundation President. "The dominos are falling: Wellbutrin, Paxil, Augmentin, and soon, AZT. Legal gymnastics are not a substitute for actually inventing drugs and charging fair prices for them." The initial anti-trust lawsuit was first filed on July 1st 2002 in the United States Federal Court for Central District of California (Western Division, Case No. 02-5223 TJH Ex). AIDS Healthcare Foundation -- represented by the law firm of Manatt Phelps & Phillips -- challenged the pharmaceutical giant's patents and their right to exclude competition in the markets for its anti-viral prescription drugs AZT, Ziagen and 3TC and to price these drugs well above competitive rates. GlaxoSmithKline (GSK) controls 40% of the lucrative U.S. AIDS drug market. Glaxo's current worldwide market for its AIDS medications is estimated to be approximately US$5 billion dollars annually. Combivir and Trizivir, Glaxo's best selling AIDS drugs today, are reformulations of existing AIDS drugs that offer patients the convenience of two-in-one and three-in-one pill dosing. The amended complaint filed today in California removes Bayh-Dole Act claims from the initial complaint and concentrates on the patents for AZT and subsequent derivative AIDS drugs and GSK's monopolisation of the market for these life-saving drugs. The drugs in the complaint include AZT, Abacavir, 3TC, Combivir and Trizivir. AHF -- a non-profit that provides medical services to over 12,000 with HIV/AIDS in the U.S., Africa and Honduras -- is suing for damages created by artificially high prices for these AIDS drugs. "It's patent piracy that has cost untold numbers their lives and is denying treatment to millions today," said Weinstein, "all in the name of corporate greed." Glaxo, long under fire by AIDS advocates over its AIDS drug pricing and policies, has also recently been under intense public scrutiny for blacklisting Canadian pharmacists who sell to US seniors via the internet. In addition, groups including the governments of Japan, Italy and the U.S. are also now investigating Glaxo for bribery, tax evasion, corruption and fraud. The attorneys general of both Connecticut and New York have also filed suit against Glaxo for Medicaid pricing fraud. The amended patent piracy lawsuit against GSK was filed in United States Federal Court for Central District of California (Western Division) on Friday April 18, 2003. Manatt attorneys Ronald S. Katz, Robert D. Becker, J. Bruce McCubbrey and Noel S. Cohen represent AHF in this action. AIDS Healthcare Foundation is the largest specialised provider of HIV/AIDS medical care in the United States. AHF serves thousands of patients in California, New York and Florida regardless of their insurance status or ability to pay. In addition, AHF currently also operates three free AIDS treatment clinics in the developing world: in South Africa, the Ithembalabantu (Zulu for "people's hope") Clinic in KwaZulu Natal, Durban, South Africa; Uganda, the Uganda Cares Healthcare Centre in Masaka, Uganda; and Honduras, the Siempre Unidos Clinic in San Pedro Sula, Honduras. http://www.aidshealth.org GLAXOSMITHKLINE PLC: Shareholders Object to Remuneration Pay ------------------------------------------------------------ The beleaguered pharmaceutical giant, GlaxoSmithKline PLC, stands to face renewed opposition from shareholders over the lucrative "golden farewell" package for its chief executive Jean-Pierre Garnier. Groups representing shareholders have already objected to GSK's remuneration policy, which adopts the concept of two-year rolling contracts for directors. Under the policy, Mr. Garnier could be given around GBP5 million in severance pay were he to leave the company. Both the Association of British Insurers and the National Association of Pension Funds (NAPF) are likely to oppose his contract at the annual meeting on May 19. Shareholder groups have argued that two-year rolling deals can lead to excessive payments for failures with executives still benefiting from huge pay-outs even if they are forced to leave their posts for poor performances. Earlier, GSK was forced to withdraw proposals to give Mr. Garnier a remuneration package worth at least GBP11 million in lieu of protests from shareholders. Aside from the GBP 2.45 million Mr. Garnier received last year, as well as an awarded shares worth GBP1.7 million with options to buy a further 900,000 later, his current contract entitles him to two years' salary and bonus on termination of his contract. He is also allowed to participate in the company's long-term incentive plans for a year after departure, and receive three years' accrued pension. Organizations such as the NAPF are challenging such packages, recommending that companies move towards one-year contracts. GSK has reportedly no plans to move from two to one-year contracts, as they argue that its remuneration policy needs to be in line with US packages. A spokesman said: "We are UK-based but we are competing globally and the US is our biggest market." However, the pharmaceutical giant has hired accountancy firm Deloitte & Touche to review all aspects of its remuneration policy. The report is expected "later this year", a spokesman said -- long after the annual meeting. CONTACT: GLAXOSMITHKLINE PLC U.S. Analyst/ Investor inquiries Frank Murdolo Phone: (215) 751 7002 Tom Curry Phone: (215) 751 5419 European Analyst/Investor Duncan Learmouth Phone: (020) 8047 5540 Anita Kidgell Phone: (020) 8047 5542 Philip Thomson Phone: (020) 8047 5543 INFINEON TECHNOLOGIES: Losses Likely to Continue in 2nd Quarter -------------------------------------------------------------- Analysts are expecting Infineon Technologies AG to report its eighth consecutive quarterly loss in the fiscal second quarter, according to Bloomberg. Loss in Europe's second-biggest maker of semiconductors could range between EUR37.9 million and EUR221.7 million, the report says. Infineon posted a net loss of EUR125.8 million for the three months through March, up from EUR108 million in the year- ago quarter, a Bloomberg survey revealed. Loss in the last seven quarter amounted to EUR2 billion. The second quarter loss comes amidst a slump in price of computer-memory chips. Spot prices for dynamic random access memory chips, which make up about a third of Infineon's revenue, fell in the quarter by about 42% to less than $4 for a 256- megabit chip. Analysts are expecting sales to increase 4% to EUR1.45 billion, but sales in the U.S., where Infineon makes more than a fifth of its revenue, may be weaker as the euro rose against the dollar, according to the survey. Chief Executive Ulrich Schumacher foresees chip prices to continue to decline in the third quarter. He nonetheless continues to aim at making the German company profitable, expecting a 17% rise in memory-chip market share by the end of this year. INVENSYS PLC: Pension Shortfall Threatens to Turn Firm Belly-up --------------------------------------------------------------- British engineering group, Invensys Plc, is in danger of falling into administration, says the Independent, which recently exposed a GBP700 million shortfall on the company's pension fund. The company has just acknowledged a GBP250 million or 47% drop in operating profit for the year to March and, according to the paper, the pension problem could force banks to foreclose loans and cut credit lines. At the very least, the company is bound to restructure its finances, the paper adds. The company has already sold half of its business and, since 1998, it has lost 95% of market value. Its assets sales have thus far parried down debt to GBP1.6 billion, which carry interests of GBP85 million. The company has a standing bank covenant to maintain EBITDA of GBP300 million, Bloomberg says. Now valued barely GBP600 million, the company grew from making car transmissions to supplying thousands of products ranging from thermostats to wind turbines. ROOSECOTE POWER: Bought Out of Administration by Centrica --------------------------------------------------------- Centrica plc announced it has entered into an agreement to acquire the 229MW Roosecote gas fired power station in Barrow in Furness, Cumbria from the administrative receivers of Lakeland Power Limited, KPMG's Michael McLoughlin and Michael Seery. The acquisition is expected to reach completion in mid May for a payment of GBP24 million, funded from existing group resources. This transaction increases Centrica's total generation capacity to 1934MW. Combined with previous generation acquisitions, the transaction will help to meet approximately 22 per cent of peak day demand cover for Centrica's domestic and commercial customers. Centrica will take over responsibility for the operation and management of the station which has achieved one of the highest availability records for all UK combined cycle gas turbine (CCGT) plants since construction in 1991. Pending completion of TUPE employee consultations, thirty-three staff will be transferred to Centrica from Lakeland Power Limited and Alstom Power Limited. Centrica will remain the gas supplier to the power station, which is located adjacent to its Barrow gas terminals. Sir Roy Gardner, Chief Executive of Centrica, said: "We are continuing to see strong progress in our electricity business and this transaction is a positive move to reflect Centrica's continued expansion in both the residential and commercial electricity market. This is also in line with our risk management strategy to generate a significant proportion of peak electricity requirements from our own portfolio, providing increased long term stability and support against electricity price fluctuations and spikes." Notes: 1. The announcement follows Centrica's acquisition in 2001 of two gas fired power stations at King's Lynn and Peterborough, providing 705MW of generation capacity, a 60 per cent interest in Humber Power Ltd, owners and operators of a 1260MW gas fired plant in Lincolnshire and the acquisition of the 240MW Glanford Brigg gas fired plant in Lincolnshire in July 2002. Centrica's wholly owned subsidiary, British Gas Trading Limited, entered into an innovative energy tolling agreement in May 2002 to acquire rights to the total capacity of an 860 MW gas-fired power plant to be built in Spalding, Lincolnshire. The plant is expected to be operational by the end of 2004. CONTACT: CENTRICA PLC Phone: 01753 494900 (Investor Relations) SOMERFIELD: Businessmen Offer to Buy Firm for Half its Value ------------------------------------------------------------ Retail entrepreneurs John Lovering and Bob Mackenzie are allegedly seeking a board recommendation before pursuing its GBP510 million takeover offer for Somerfield, the Telegraph says. According to the paper, the company is considering the offer, although at present it is seeking reassurance that the funding is secure. The offer, which prices Somerfield at just over 100p a share, was forwarded to the company last Friday. Since then, advisers from both sides have been meeting to discuss details. Dresdner Kleinwort Wasserstein is reportedly advising Somerfield, while Bridgewell is understood to be leading the negotiations for Misters Lovering and Mackenzie. The two businessmen are thought to be backed by a consortium of banks led by HBOS and the Royal Bank of Scotland. John von Spreckelsen, Somerfield's executive chairman, has yet to comment on the offer, which is considered a paltry sum for a chain that could be worth as much as GBP1 billion, the Telegraph says. The current book value of the company is based on a 1996 computation. Estimates peg the company's present value at 391p a share. Meanwhile, Mr. von Spreckelsen is expected to face a barrage of questions when the board meets to consider the current offer. He purchased 100,000 shares the day before Misters Lovering and Mackenzie made their offer. The company has maintained that the stock buy was merely coincidental. SSL INTERNATIONAL: HgCapital Joins Bid for Medical Division ----------------------------------------------------------- Private equity house HgCapital has joined venture capitalists and trade buyers in the bidding for the medical assets of healthcare group SSL International. The group, which was created in 1999 by the merger of Seton Scholl and London International Group, announced less than three weeks ago that it is selling the medical division, and hired bank NM Rothschild & Sons to handle the sale. The division is being offered both by parts and as a single entity, and HgCapital is understood to be keen on acquiring the business either way. The asset includes the profitable Regent Biogel business, which makes surgical gloves, the hospital antiseptic brand, Hibi, and a wide range of wound management products. The division, which accounts for a third of SSL's group sales, has underlying sales of GBP207.5 million in the year to March 2002. Analysts expect the disposal to raise between GBP200 million and GBP300 million. Brian Buchan, chief executive, and Garry Watts, finance director, are disposing the asset to focus on the consumer healthcare division, which accounts for 55 per cent of group sales. The consumer brands include Durex, Scholl and medicines such as Meltus for coughs. Trade buyers that are expected to participate in the auction includes, Smith & Nephew and Denmark's Coloplast. The decision to sell the medical division comes after several years of underperformance by the company's shares, which were badly hit by an accounting scandal. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam, Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors. Copyright 2003. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *