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/raid1/www/Hosts/bankrupt/TCREUR_Public/030613.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 Friday, June 13, 2003, Vol. 4, No. 116 Headlines C Z E C H R E P U B L I C BOBY CENTRUM: Sells Prime Properties for CZK231 Million D E N M A R K MAERSK AIR: Sells Subsidiary Via Management Buyout F I N L A N D FINNAIR PLC: Union Strike Disrupts Domestic Services FINNAIR PLC: May Load Factors Plummet Due to SARS Outbreak F R A N C E ARIANESPACE: Launches First Commercial Satellites Since ESA Aid G E R M A N Y BANKGESELLSCHAFT BERLIN: GE Buys Allbank for EUR183 Million BAYER AG: Baycol Cases Settled Now Number 888 from 785 in May I R E L A N D DZ BANK: Moody's Downgrades Financial Strength Rating to 'D+' I T A L Y CIRIO FINANZIARIA: Court Postpones Bankruptcy Hearing to June 18 TELECOM ITALIA: BC Partners-led Group Buys 61% Stake in New SEAT TELECOM ITALIA: Reaches Various Agreements with Unions TELECOM ITALIA: S&P Says Seat Pagine Sale Won't Affect Ratings N E T H E R L A N D S KLM ROYAL: Extends Commercial Agreement with Continental N O R W A Y NORSK FAMILIEOKONOMIE: Sold to Soragna for Undisclosed Amount P O L A N D ELEKTROMONTAZ-EKSPORT: Restructuring Plan Approval Still Pending KOMERCNI BANKA: Court Junks Involuntary Bankruptcy Petition NETIA HOLDINGS: Issues Shares Upon Exercise of Warrants S W E D E N INTENTIA INTERNATIONAL: Rights Issue Approved S W I T Z E R L A N D MOUNT10 HOLDING: Execs Buy Shares to Stave-off Insolvency WINTERTHUR GROUP: Bottom Line Main Consideration in Divestments WINTERTHUR GROUP: To Get GBP1.1 Billion from Churchill Sale U N I T E D K I N G D O M AMP LIMITED: Issues Update on Demerger Proposal API GROUP: Expects Good Full-year Results Despite SARS, Iraq War AWG PLC: WestLB Cancels Financial Support for Bream's Bid BLAVOD BLACK: Reduces Operating Loss; Expects to Breakeven Soon CORDIANT COMMUNICATIONS: No.1 Investor to Seek Debt Rollover EQUITABLE LIFE: To Find Ways to Avoid Paying Damages GAMING INSIGHT: Shares Suspended Due to Financial Uncertainties HURLINGHAM PLC: Fails to Recover from Impact of Iraq War, SARS INTERACTIVE DIGITAL: Turnover Improvement Cuts Losses KM GROUP: Sale Negotiations End Without Deal OASIS HEALTHCARE: Failed Acquisitions Spill Red Ink on Results TELEWEST COMMUNICATIONS: Trading Still in Line with Expectations ********* ========================== C Z E C H R E P U B L I C ========================== BOBY CENTRUM: Sells Prime Properties for CZK231 Million ------------------------------------------------------- Prague-based Daniel Sorm has reportedly acquired the remains of bankrupt complex Boby Centrum. According to Prague Business Journal, major parts of the sports and entertainment compound based in Brno were bought for CZK231 million. The starting price for the assets was CSK210 million. The buyer acquired a hotel, a clinic with a fitness center and some sports and entertainment facilities. Daniel Sorm is registered under the Sport Casinos trademark. CONTACT: BOBY CENTRUM Sportovni 2a, 602 00 BRNO ICO: 607 445 45, zapsana v OR u KS Brno, oddil B, vlozka 1554 DIC: 290 - 607 445 45 Contact: Pavel Zerrich, Manager Phone: +420 541 638 660 ============= D E N M A R K ============= MAERSK AIR: Sells Subsidiary Via Management Buyout -------------------------------------------------- Maersk Air has secured binding agreement on a management buyout, involving subsidiary, Maersk Air Ltd. (Birmingham). The agreement was finalized on June 6, but is considered effective since April 15, 2003. Maersk Air director for public relations, Per Brinch, said the move would enable the carrier to concentrate on Maersk Air in Denmark. The divestment, however, was made with a loss, he said. The Danish airline, which recently adopted measures to enhance competitiveness necessary for survival, refused to comment on the financial aspect of the transaction, but daily Boersen pegged the loss at about DKR100 million. The new management will rename Maersk Air Ltd (Birmingham) to Duo Airways Ltd. ============= F I N L A N D ============= FINNAIR PLC: Union Strike Disrupts Domestic Services ---------------------------------------------------- Some 3,000 members of the Finnish Aviation Union stopped Finnair's operation on Tuesday for a two-day protest against the carrier's personnel policy. According to the Helsingin Sanomat, the strike launched until the morning of Thursday led to the cancellation of nearly all of Finnair's domestic services. It affected aircraft maintenance, ground and passenger services, and Finnair's freight and catering operations. The employees claim the airline has violated agreements made with the union, and they were also upset with plans to increase outsourcing of activities. Finnair, which pegs the cost of the action at EUR4 million, called the walkout an illegal strike. The action, the report said, was brought to the attention of the airline just two hours before it started, surprising passengers who were not advised of the cancellation of their flights. In a statement, Finnair said the flight today of AY077 from Helsinki to Osaka and the return flight from Osaka to Helsinki have been cancelled due to the strike. FINNAIR PLC: May Load Factors Plummet Due to SARS Outbreak ---------------------------------------------------------- In May Finnair carried a total of 517,200 passengers, which is 13.6% less than the year before. About 418,100 of the passengers were carried in scheduled traffic (-15.0%) and 99,100 in leisure traffic (-7.6%). The total passenger traffic (RPK's) decreased by 19.3%, while the capacity (ASK) was down by 3.0 %, resulting in a passenger load factor (including leisure flights) of 58.3%, 11.8 points lower than last year. The May figures were affected by SARS fears and related travel restrictions, especially in the Far East traffic, as well as the adverse business conditions due to the global economic slowdown. The capacity decreasing measures implemented in May will continue and be more noticeable in June. Departure punctuality of scheduled flights was 95.8% (based on a fifteen minute standard), 2.0 percentage points better than in May 2002. Including leisure flights departure punctuality was 95.0% (+1.6 p.u). As from January 2003 the traffic performance report will also include the figures of Finnair's associated company Aero Airlines AS, to which Finnair handed over most of it's Helsinki-Tallinn operations on June 1, 2002. In May, Aero carried 10,100 passengers with a PLF of 51.6%. Scheduled traffic RPKs in scheduled traffic (international + domestic) decreased by 23.9%. The change in capacity was -1.2%. Passenger load factor was 50.1%, 15.0 percentage points lower than last year. In scheduled international traffic, premium traffic decreased by 16.0%, while the total number of passengers was down by 16.4%. Capacity in ASKs was -0.5%, while RPKs decreased by 25.3 %. In European scheduled traffic, ASKs increased by 2.7%, and as RPKs decreased by 10.6%, the passenger load factor was 52.3%, down 7.8 points from previous year. In North Atlantic scheduled traffic, capacity decreased by 10.1 %. Change in RPKs was -25.8%, and passenger load factor for May was 67.7%, 14.3 p.u. lower than the previous year. Premium traffic decreased by 35.7%. In Far East scheduled traffic, capacity decrease was 2.9 %. The passenger traffic was down by 49.4%. Passenger load factor was 38.6%, 35.5 percentage units down. The number of premium passengers decreased by 65.0%. Domestic scheduled traffic decreased by 14.0% on a capacity decrease of 5.1 %. Passenger load factor decreased by 5.1 p.u. to 49.7%. Leisure traffic ASKs for leisure traffic decreased in May by 8.7% and RPKs decreased accordingly by 8.4%, resulting in a passenger load factor of 85.6%, 0.2 points higher than last year. Cargo Cargo traffic decreased by 2.0% in terms of cargo tonnes carried. Cargo and mail tons decreased by 2.2%. The Far Easter Cargo traffic increased 11.0%. Tons in the North Atlantic traffic decreased 14.2%. Load factor in chartered Cargo traffic was 71.3%. Cargo and mail tons up by 1.1% during January-May. Next traffic statistics will be released on July 9, 2003 at 9 a.m. (7 a.m. UTC). Finnair Oyj Communications June 11, 2003 CONTACT: FINNAIR PLC Taneli Hassinen Financial Communications Phone: +358 9 818 4976 Mr. Petri Pentti, SVP and CFO Phone: +358 9 818 4950 Mr. Christer Haglund, VP Corporate Communications Phone: +358 818 4007 =========== F R A N C E =========== ARIANESPACE: Launches First Commercial Satellites Since ESA Aid --------------------------------------------------------------- Arianespace on Wednesday orbited two geostationary communications satellites, Optus and Defence C1, for the Australian operator Optus and the Australian Department of Defence, and BSAT-2c for the Broadcasting Satellite System Corporation (B-SAT) of Japan under terms of a turnkey contract with Orbital Sciences Corporation of the United States. With its 12th successful mission, the Ariane 5 Generic launcher confirmed its technical and operational maturity. This latest success comes two months after the previous Ariane 5 flight, which orbited a dual-satellite payload, and less than 10 days after Starsem's successful Soyuz commercial mission with the European Space Agency's Mars Express spacecraft. Several days prior to launch, a ministerial-level ESA Council meeting authorized the Ariane 5 support plan and approved construction of a Soyuz launch pad at the Guiana Space Center, Europe's Spaceport. These decisions give Arianespace the means to operate a full range of launch vehicles that respond to all client requirements. The choice of Ariane by major space telecom manufacturers and operators in the United States, Japan and Australia clearly reflects international recognition of Arianespace's top-flight launch service. Optus and Defence C1 is the second Australian satellite to be launched by Ariane. In September 1987, Ariane orbited the Aussat K3 satellite, while Singtel, the parent company of operator Optus, had its ST-1 spacecraft launch by Ariane in 1998. BSAT-2c is the 19th satellite launched by Ariane for Japan, and the fifth for telecom operator B-SAT, following BSAT-1a on Flight 95, BSAT-1b on Flight 108, and BSAT-2a and BSAT-2b on Flights 140 and 142. BSAT-2C is the fifth satellite built by Orbital Sciences Corporation to be launched by Arianespace using an Ariane 5 since March 2001. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: GE Buys Allbank for EUR183 Million ----------------------------------------------------------- Germany's Bankgesellschaft Berlin, which posted net losses in 2002 of EUR699 million (US$818 million), has agreed to sell Allgemeine Privatkundenbank AG to General Electric Company for EUR183 million. A statement by General Electric's consumer finance unit, General Electric Deutschland, confirmed that the two companies have signed a purchase agreement that works out to EUR114.75 a share, including the bank's Private Credit and Auto Financing operations. TCR-Europe earlier reported that the parties have been in negotiations, although both declined to comment on the matter. Proceeds from the disposal of Allbank could potentially help ailing Bankgesellschaft in its restructuring efforts. Bankgesellscaft wants to become a regionally focused bank, concentrating on retail banking in its core region and a few other profitable businesses. Bankgesellschaft has already tried on several occasions to sell Allbank, which has 900 staff and a network of 70 branches across Germany. BAYER AG: Baycol Cases Settled Now Number 888 from 785 in May ------------------------------------------------------------- The Baycol lawsuits settled out of court by German drugs and chemicals group Bayer AG increased from 785 in May to 888 at present. During its May update, the drugmaker said it had spent US$240 million on settling the 785 cases related to the cholesterol-lowering drug. The firm did not put figures on its expenses when it revealed the increase of cases settled on Tuesday. "The settlement figure is not surprising, and the company is now more than half-way toward settling the estimated 1,600 serious cases," said WestLB Panmure analyst Andreas Theisen, according to Reuters. "We're somewhat surprised with the growth in cases filed, though this is not really a worry yet." Bayer is currently waiting for the ruling of U.S. District Court Judge Michael Davis whether he would allow users of Baycol form a class, entitling them to claim over US$1 billion in damages relating to the drug. Bayer won the first two cases that came to court and settled a case due to be tried June 6. A second case set for trial that day was also withdrawn. Bayer's success in winning a lawsuit in March buoyed the firm's shares 83%. While it increased the number of cases settled out of court, the Baycol cases pending which stand at 8,800 in May also increased to around 9,400, as of the present. ============= I R E L A N D ============= DZ BANK: Moody's Downgrades Financial Strength Rating to 'D+' ------------------------------------------------------------- Moody's Investors Service downgraded to 'D+' from 'C-' DZ Bank Ireland's financial strength rating due to the strong integration of the entity in DZ Bank. DZ Bank has a 'D' financial strength rating reflecting reduced financial and managerial flexibility. Moody's said, while DZ Bank Ireland has considerably less risk in its loan portfolio than its parent, it has experienced some challenges in comparison with similar rated peers. The rating agency, at the same time, upgraded the long-term debt and deposit ratings of the Dublin-based bank from 'A2' to 'A3'. It also maintained its P-1 short-term and debt and deposit ratings because of the underlying support present among the German cooperative banking movement, of which it is a central bank. DZ Bank Ireland had total assets of around EUR5 billion as at December 31, 2002. ========= I T A L Y ========= CIRIO FINANZIARIA: Court Postpones Bankruptcy Hearing to June 18 ---------------------------------------------------------------- The scheduled June 11 bankruptcy hearing for Italian agro-food group, Cirio Finanziaria SpA, has been moved yet again to June 18, Dow Jones Newswires reported, citing news agency MF-DJ. A group of bondholders had earlier asked a Rome court to declare the troubled pasta sauce maker bankrupt. Cirio was declared in cross-default on more than EUR1 billion of outstanding bonds after failing to repay EUR150 million in unrated bonds last year. Subsequently, Cirio proposed a debt-to-equity swap that would result in most bondholders losing most of their money. It said in a prospectus filed to the stock market regulator that bondholders subscribing to its EUR1.3 billion debt-for-equity swap face the risk of losing as much as 86.5% of their securities' face value. A meeting of bondholders will be held in mid-July where they can either approve or disapprove the swap plan. It is not certain how much they could reclaim if they resisted the plan and rushed Cirio to bankruptcy. According to Gino Bosco, the lawyer who filed the bankruptcy request, the restructuring plan is "not convincing at all because it doesn't foresee any repayment prospect for bondholders." He noted that if Cirio bondholders were to accept to swap their bonds into shares, they would lose the right to request the company be declared bankrupt. The company lost EUR145 million in 2002 and had EUR1.4 billion in long- and short-term debt. It is trying to dispose some of its assets, including troubled football club, Societa Sportiva Lazio Spa, in order to re-launch itself. CONTACT: CIRIO Phone: ++39 06 4145700 Fax: ++39 06 4145729 Home Page: http://www.cirio.it TELECOM ITALIA: BC Partners-led Group Buys 61% Stake in New SEAT ---------------------------------------------------------------- Telecom Italia and a consortium of investors formed by BC Partners, CVC Capital Partners, Investitori Associati and Permira have entered into a Sale and Purchase Agreement for the sale of approximately 61.5% of the share capital of "New SEAT." New SEAT is the company that will inherit the Directories, Directories Assistance and Business Information operations following completion of the previously announced demerger of SEAT Pagine Gialle. The agreed price is equal to EUR0.598 per "New SEAT" ordinary share, which equates to an enterprise value of approximately EUR5.65 billion. The value of the stake sold by Telecom Italia is therefore equal to EUR3,032,923,166. Including New SEAT's estimated net financial debt at closing of EUR708 million, the transaction will allow Telecom Italia to reduce its net financial debt by approximately EUR3.74 billion, in line with the pre-established objective. The completion of the sale will be subject to the demerger of SEAT Pagine Gialle becoming effective, the admission to listing of New SEAT that is expected to occur by the beginning of August, and the approval of competent anti-trust authorities. Citigroup and Lazard are the financial advisors of Telecom Italia in this transaction, while Gianni Origoni Grippo acts as its legal counsel. The consortium of buyers is assisted by Credit Suisse First Boston as financial advisor and by Giliberti Pappalettera Triscornia and Dickson Minto W.S. as legal counsel. The debt financing of the transaction has been organized by BNP Paribas, Barclays, Credit Suisse First Boston and Royal Bank of Scotland. TELECOM ITALIA: Reaches Various Agreements with Unions ------------------------------------------------------ Telecom Italia and the Union Organizations, SLC CGIL, FISTEL CISL and UILCom UIL, have recently signed a verification agreement regarding the May 27, 2002 deal associated with the Telecom Italia Business Plan. The parties have also signed an agreement on Performance Bonuses for the 2003-2006 period. The business plan investments and efficiency gains targets have been confirmed for the accord signed last year. Employment operating guidelines, as defined in the previous accord, will make it possible to consensually reach an appropriate employment balance and achieve the professional mix that the Group requires. To this end, voluntary redundancy instruments will be an option through recourse to "Mobility" provisions as per Law no. 223/91. Provisions have also been made for targeted new job creation, specifically in Network operations, in order to acquire and develop the new skills necessary for developing strategic offerings, and in Customer Operations, through the addition of a further two Telecontact Center production units. Starting from January 1, 2004, the first of these units will be set up in Caltanisetta; the second is in Catanzaro and will go online from April 1. A new mechanism for establishing the amount to be paid out to Telecom Italia employees for the 2003-2006 Performance Bonuses has been put in place. This mechanism is based on two macro indices that link earnings results and customer satisfaction in the value chain through a close cause/effect relationship. In addition to the current earnings index (gross operating margin, 70% weighting), a Customer Loyalty index has been added (30% weighting) to highlight Telecom Italia's strategy of putting the customer first. This index, which shall be issued every six months specially for bonus payment purposes, provides a summary of the ongoing monitoring of customer loyalty drivers, specifically regarding: product and service technical quality, customer relations, offering terms and conditions, and corporate image. TELECOM ITALIA: S&P Says Seat Pagine Sale Won't Affect Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services said the sale of Telecom Italia SpA's (TI; BBB+/Stable/A-2) directories business, Seat Pagine Gialle, to a consortium of private investors will not lead to a change in the ratings or outlook on the Italian telecoms operator. The disposal of TI's 61% stake is fully in line with Standard & Poor's debt-reduction expectations for the group, and will reduce debt by EUR3.74 billion. The Seat sale is a key component of the asset-disposal plan that should help mitigate the debt impact of TI's pending merger with parent Olivetti SpA (BBB/Watch Pos/--) and, together with the new group's capacity to generate substantial free cash flow, enable debt-protection measures to rapidly return to levels similar to those at year-end 2002. Standard & Poor's now estimates that TI's adjusted net debt to EBITDA should fall in the middle of the 3.5x-4x range at year-end 2003 and not materially exceed 3x at year-end 2004. ===================== N E T H E R L A N D S ===================== KLM ROYAL: Extends Commercial Agreement with Continental -------------------------------------------------------- KLM Royal Dutch Airlines and Continental Airlines have further extended the commercial agreement they initiated in December 2001 and expanded in June 2002. Both airlines have tuned this new long-term agreement with their joint partner, Northwest Airlines. The renewed agreement sees KLM and Continental codesharing on flights beyond their hubs in Houston, New York/Newark and Amsterdam, to a wide range of destinations in the United States, Europe, Africa and the Middle East. In addition, passengers will continue to benefit from the linking of KLM and Continental's loyalty programs and reciprocal access to lounge facilities. KLM and Continental's existing codesharing network can now be extended with new codeshare destinations on KLM flights into Europe, the Middle East and Africa and on Continental flights into the U.S., Mexico, Central and South America. Subject to government approval, KLM will code share to an additional 22 destinations throughout Latin America. Other additional destinations in the US are also contemplated by both airlines. Examples of additional code share destinations for KLM include: Acapulco, Cancun, Ixtapa and Saint Maarten. Continental is Northwest Airlines' key marketing alliance partner in the United States and has now reaffirmed its long-term partnership with KLM. The three carriers intend to jointly improve and extend connections for their passengers at their respective hubs and gateways, further strengthening the position of KLM's home base, Amsterdam Airport Schiphol. =========== N O R W A Y =========== NORSK FAMILIEOKONOMIE: Sold to Soragna for Undisclosed Amount ------------------------------------------------------------- Lycos Europe N.V. sells its fully owned subsidiary, Norsk Familieokonomie AS, to Soragna Invest AS. Norsk Familieokonomie AS is a Norwegian membership-based shopping club that distributes multiple services like insurance, electricity, telephony and banking at low cost to its members. The sale follows Lycos Europe N.V.'s decision to withdraw from non-strategic business activities and is in line with the sale of its other Norwegian subsidiaries, Massmarket AS and Nettavisen AS in 2002. During the first four months of fiscal year 2003, the loss-making unit generated paid services and shopping revenues of only EUR1 million. The agreement is still subject to the approval of Lycos Europe N.V.'s supervisory board. =========== P O L A N D =========== ELEKTROMONTAZ-EKSPORT: Restructuring Plan Approval Still Pending ---------------------------------------------------------------- The future of struggling building contractor Elektromontaz-Eksport is hanging in the balance as the management awaits the approval of the Industrial Development Agency for its restructuring plan. According to Poland's Warsaw Business Journal, the company, which has already withdrawn two court applications for bankruptcy, may soon fall prey to the continuing recession in the domestic construction sector. Hopes of turning its fortunes lie in the Agency's approval of the plan. Revenues of the company have been in steady decline, reaching PLN14.8 million in the first quarter of 2003, as against PLN41.6 million for the same period last year. Operational loss in the first three months of 2003 also increased to PLN11.7 million and its net loss topped PLN12.4 million. The company's dire condition is further exacerbated by its PLN150 million liabilities, the news agency added. Elektromontaz-Eksport is a small building contractor specializing in wiring systems and electrical equipment. It became insolvent in December 2002. KOMERCNI BANKA: Court Junks Involuntary Bankruptcy Petition ----------------------------------------------------------- The municipal court of Prague has rejected the involuntary bankruptcy petition brought against Komercni Banka by businessman Jaroslav Kulenda and his company KUM spol, the bank said in a statement. The court, which handed the decision June 4, said the petitioner failed to prove that he was a creditor of the bank. Komercni Banka, a.s. has a pending criminal case against Mr. Kulenda, claiming damages brought by his legal action. NETIA HOLDINGS: Issues Shares Upon Exercise of Warrants ------------------------------------------------------- Netia Holdings S.A. (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services, announced Tuesday that on June 10, 2003, it issued 97,550 series J shares at an issue price of PLN2.53 per share upon the exercise of 49,875 two-year subscription warrants and 47,675 three-year subscription warrants by their holders. Each series J share entitles its holder to one vote at Netia's general meeting of shareholders. Netia's series J shares are publicly traded on the Warsaw Stock Exchange under the same code as all other ordinary shares of Netia, i.e., code No. PLNETIA00014. As a result of this issuance of these shares there are currently: (a) 32,374,346 two-year subscription warrants traded on WSE under the ticker "NETPPO2", entitling their holders to subscribe for Netia's series J shares by April 29, 2005; and (b) 32,376,546 three-year subscription warrants traded on WSE under the ticker "NETPPO3", entitling their holders to subscribe for Netia's series J shares by April 29, 2006. Following the issuance of these shares Netia's issued and outstanding share capital equals PLN344,142,762 and is divided into 344,142,762 shares, PLN1 par value per share. All outstanding shares give rise to 344,142,762 votes at Netia's general meeting of shareholders. Netia will file the relevant motion for the registration of the share capital increase with the Polish court by July 7, 2003. The subscription warrants were exercised in accordance with Netia's Polish prospectus dated April 17, 2002, as amended. Under Polish law, Netia is required to report in Poland its share capital increase each time the subscription warrants are exercised. For the purpose of U.S. reporting, Netia will announce the share capital increases, if any, in the form of a press release once a month. Current information on Netia's share capital will be updated each time any warrants are exercised at Netia' s website at http://www.investor.netia.pl =========== S W E D E N =========== INTENTIA INTERNATIONAL: Rights Issue Approved --------------------------------------------- Intentia International AB announces that an extra general meeting approved the board of directors' proposal for a Rights Issue as described in the notice to attend. Briefly, the Rights Issue means that: (a) A new share issue with preferential rights for current shareholders will include a maximum of 73,146,400 shares, each with a par value of SEK10. Since the new share issue price of SEK5.75 per share is less than the current par value per share, the remaining capital will be transferred from the share premium reserve. (b) The total number of shares in the Company can increase from 36,573,200 to a maximum of 109,719,600 shares. (c) If fully subscribed, the new share issue will increase Intentia's share capital by a maximum of SEK731,464,000 to at most SEK1,097,196,000 before transaction costs. (d) The new share issue proceeds are intended to finance the repurchasing of Intentia's outstanding convertible notes and related costs. (e) Each shareholder is entitled to subscribe for two (2) new shares of the same kind for every share he or she currently owns, at a subscription price of SEK5.75 per share. (f) June 16, 2003 is the proposed record date for the subscription rights, which means that the last trading day for the Intentia shares including subscription rights is June 11, 2003. (g) Trading in subscription rights is anticipated to take place during the period June 19 to July 7, 2003. (h) The subscription period is expected to take place from June 19 to July 10, 2003. (i) The prospectus and application form will be sent to Intentia's shareholders beginning approximately June 18, 2003. In conjunction with the new issue, the extra general meeting decided to change the share capital limits to a minimum of SEK350,000,000 and a maximum of SEK1,400,000,000. Bjorn Algkvist, Intentia's CEO, commented: "It is satisfying that our shareholders' agree with our view that we now have an opportunity to eliminate the speculations about our financial position created by the convertible notes. Based on Intentia's balance sheet as of March 31, 2003, full subscription will result in pro forma stockholders' equity of SEK1,209 million, corresponding to an equity/assets ratio of 38 percent. Liquid funds will exceed interest bearing liabilities, including the remaining convertible debt, by SEK 118 million." Intentia is one of the world's leading suppliers of collaboration solutions. It offers a one-stop shop for all collaboration needs within numerous industry segments. It develops, implements and maintains its own solutions to produce the highest possible level of customer satisfaction. The Intentia Solution consists of applications covering customer relationship management, enterprise management, supply chain management, business performance measurement, e-business and value chain collaboration. Intentia has more than 3,200 employees and serves over 3,400 customers in the manufacturing, maintenance and distribution industries via a global network spanning some 40 countries. Intentia is a public company traded on the Stockholm Stock Exchange under the symbol INT B. Contact: INTENTIA INTERNATIONAL Bjorn Algkvist President and CEO Intentia International AB Phone: +46 8 5552 5605 Fax: +46 8 5552 5999 Mobile: +46 733 27 5605 E-mail: bjorn.algkvist@intentia.se Hakan Gyrulf Vice President and CFO Intentia International AB Phone: +46 8 5552 5825 Fax: +46 8 5552 5999 Mobile: +46 733 27 5825 E-mail: hakan.gyrulf@intentia.se Thomas Ahlerup Head of Corporate and Investor Relations Intentia International AB Phone: +46 8 5552 5766 Fax: +46 8 5552 5999 Mobile: +46 733 27 5766 E-mail: thomas.ahlerup@intentia.se Homepage: http://www.intentia.com ===================== S W I T Z E R L A N D ===================== MOUNT10 HOLDING: Execs Buy Shares to Stave-off Insolvency --------------------------------------------------------- Following the shareholders meeting in May 2003, part of the company's management and administrative board as well as other strategic investors subscribed to new shares in the company to the value of EUR1.5 million. A portion of these incoming funds will be used for payments to creditor banks in June 2003, in order to secure unconditional write-offs by the banks amounting to EUR2.1 million in the company's favor with effect from the end of June 2003. The company's indebtedness to banks will be reduced by a total of EUR2.8 million. This action has averted the risk of insolvency, assuming business continues to develop positively. CONTACT: MOUNT10 HOLDING AG Lorena Caccese/Claudia Schumacher Grundstrasse 12 CH-6343 Rotkreuz Phone: +41 41 798 3344 Fax: +41 41 798 3393 E-Mail: lorena.caccese@mount10.com E-mail: claudia.schumacher@mount10.com Home Page: http://www.mount10.com WINTERTHUR GROUP: Bottom Line Main Consideration in Divestments --------------------------------------------------------------- Leonhard Fischer, the chief executive of Winterthur, which just sold its direct insurance business, declined to comment on the group's specific divestment plans, according to Reuters. "We don't have a divestment strategy. Our strategy is to strengthen the capital position of Winterthur Group and as part of that we also review our portfolio," Mr. Fischer told Reuters. The report said Credit Suisse Group's Winterthur insurance arm might sell off further units to improve its capital position. Winterthur said Wednesday it sold its British direct insurance business Churchill to Royal Bank of Scotland for around GBP1.1 billion (US$1.82 billion) in cash. Mr. Fischer reiterated the company's goal of becoming profitable for the full year 2003. The firm's results recovered in the first quarter, with both Life & Pensions and Insurance improving their profitability versus the fourth quarter, due primarily to increased investment income, tariff increases and lower administration costs. WINTERTHUR GROUP: To Get GBP1.1 Billion from Churchill Sale ----------------------------------------------------------- Winterthur Insurance, a subsidiary of Credit Suisse Group (NYSE:CSR) (Other OTC:CSGKF), has signed an agreement to sell its subsidiary Churchill to The Royal Bank of Scotland Group plc for approximately GBP1.1 billion in cash. The sale is an important step in repositioning Winterthur's business portfolio. In addition, the transaction will significantly strengthen the capital position of Winterthur. Subject to regulatory approvals, the transaction is expected to be completed in the third quarter of 2003. The GBP1.1 billion price tag will be payable in cash at completion. In addition, the transaction will involve the repayment of debt to Credit Suisse Group companies amounting to approximately GBP100 million. Upon closing, the transaction will substantially strengthen Winterthur's consolidated E.U. solvency ratio. Furthermore, the sale will result in a significant capital gain expected in the third quarter of 2003. Oswald J. Grubel, Co-CEO of Credit Suisse Group and CEO of Credit Suisse Financial Services, said: "The strength of The Royal Bank of Scotland Group's proposal together with the commercial fit with its direct insurance operation were central factors behind our decision to sell. The transaction provides Winterthur with more financial flexibility for selective growth and strengthens the capital base of Winterthur Group." Winterthur Group CEO Leonhard Fischer said: "Although Churchill has been a very successful operation for Winterthur, we decided to sell it because it operates with a different business model and a different brand from the rest of Winterthur Group. The sale of Churchill has no repercussions or strategic implications for Winterthur's life business in the UK market, which is completely separate operationally and legally." Winterthur Group Winterthur Group is a leading Swiss insurance company with head office in Winterthur and, as an international company, ranks among the top five providers of direct insurance in Europe. The Group's products include a broad range of property and liability insurance products, as well as insurance solutions in life and pensions that are tailored to the individual needs of private and corporate clients. With approximately 32,000 employees worldwide, Winterthur Group achieved a premium volume of CHF37.4 billion in 2002 and reported assets under management of CHF142.8 billion as of March 31, 2003. Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium-sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 73,000 staff worldwide. As of March 31, 2003, it reported assets under management of CHF1,160.5 billion. The Royal Bank of Scotland Group is Europe's 2nd and the world's 5th largest banking Group. The Group's main areas of operation are the UK, Europe and the United States. It currently employs 111,800 staff worldwide. At June 10, 2003 the market capitalization of the Group was GBP47.7 billion. The Group includes one of the strongest portfolios of brands in the financial services sector including The Royal Bank of Scotland, NatWest, Direct Line, Coutts, Tesco Personal Finance, Ulster Bank, Lombard, and in the US, Citizens. =========================== U N I T E D K I N G D O M =========================== AMP LIMITED: Issues Update on Demerger Proposal ----------------------------------------------- The AMP Board provides this update on the progress of the demerger proposal: "The Board continues to believe the demerger, announced on May 1, 2003, is in the best long-term interests of shareholders. The Group is on target to achieve the demerger by the end of 2003, subject to shareholder and necessary regulatory approvals. "The Board believes that the separation of the Australian and UK businesses will allow their fundamental value to be better reflected in the market, given the focus of the demerged companies on specific geographic markets. This has already been evidenced by the expressions of interest received in respect of various components of the business, as AMP's Chairman Peter Wilcox indicated at the Annual General Meeting on May 15, 2003. "While this continuing interest remains informal and general, it confirms the Board's view that the demerger will enhance shareholder value. If any formal offers are received, they will be given proper consideration and, if appropriate, brought to shareholders. "ASIC noted earlier this week that a number of details regarding the demerger remain outstanding. While the Board understands the market's desire for more information, substantial work remains to be completed before that information is available for release. All relevant information will be contained in the Explanatory Memorandum, which will be lodged with ASIC in the fourth quarter of this year. "An Independent Expert's Report is being commissioned for inclusion in the Explanatory Memorandum. Details about this appointment will be available shortly. "Advisers already appointed include investment banks Caliburn Partnership and UBS, as principal advisers, Ernst & Young as investigating accountants and Tillinghurst as consulting actuary. Legal advisers include Mallesons and Minter Ellison in Australia and Freshfields and Lovells in the U.K. "In preparation for the demerger, the company is now being run on geographic lines, with Andrew Mohl, AMP's CEO, responsible for the Australasian-based businesses and Roger Yates, Managing Director for Henderson Global Investors, running the U.K.-based businesses, reporting to Mr. Mohl. "An Extraordinary General Meeting of shareholders to approve the demerger proposal will be held at the end of the year." CONTACT: AMP LIMITED Level 24, 33 Alfred Street Sydney NSW 2000 Australia ABN 49 079 354 519 Mark O'Brien, Investor Relations Phone: 9257 7053 API GROUP: Expects Good Full-year Results Despite SARS, Iraq War ---------------------------------------------------------------- API Group reduced its pretax loss to GBP849,000 from GBP2.29 million a year earlier, and expects to improved this further for the full year. Operating profit was up to GBP0.1 million from a loss of GBP0.9 million because of improved operating efficiencies, cost reductions and capital investment, according to the group. The company aims to achieve its target despite difficult trading conditions. Chairman David Hudd expects the war in Iraq to affect many of the group's businesses, and the outbreak of SARS to affect business in China. He expects these impacts to show in the group's results in the second half. He said there are clear prospects for continuing improvement in the remainder of the year compared to 2002. He is counting on the seasonal factors and the ongoing realization of benefits from rationalization programs and performance improvement initiatives to help sustain performance. The group said its balance sheet continued to be strengthened with borrowings reduced to GBP13.9 million from GBP14.8 million and gearing at 23%, down from 24%. AWG PLC: WestLB Cancels Financial Support for Bream's Bid --------------------------------------------------------- A new twist to the intended takeover of AWG PLC is taking shape after German bank WestLB AG confirmed in a statement that it will not be financing any bid by Bream Investments Ltd for the water services and infrastructure management group. WestLB said it is withdrawing its offer of funding to Bream, who is bidding at a price range of 510-545 pence, in the absence of a recommendation from AWG for an offer price at that range, or access to further information, which would support an increased price. The German bank was previously willing to support Bream's bid, approaching AWG in January with an all-cash offer proposal worth 510 pence per share that the AWG board rejected. It came back with an indicative offer in the price range of 520-545 pence per share in March, which AWG regarded as "substantially undervaluing the business." AWG advisers subsequently met WestLB's financial advisers to discuss value, but no indication of a higher offer has been forthcoming. There have also been meetings between AWG's lawyers and WestLB's lawyers, AFX said. Since then, the controversy surrounding WestLB's chief deal-maker, Robin Saunders, has placed the deal in doubt. This compounds worries that WestLB will be unable to dispose of Mid Kent Water, which is an essential requirement for the deal to receive regulatory approval. Meanwhile, Bream responded to WestLB's withdrawal by saying it is in active discussions with other sources of finance and expects to make a further announcement on or before the June 18 deadline. No assurance has been given that an offer will be forthcoming. Bream is the buyout vehicle behind the GBP1 billion pursuit of British utility AWG. It comprises a consortium led by Gordon Morrison, the brother of Sir Fraser Morrison who is being sued by AWG in connection with the sale of his family construction business to AWG three years ago. CONTACT: Anglian House, Ambury Rd. Huntingdon, Cambridgeshire PE29 3NZ United Kingdom Phone: +44-1480-323-000 Fax: +44-1480-323-115 Home Page: http://www.awg.com Contact: Peter Hickson, Chairman Elliott M. Mannis WEST LB John Godfrey Phone: 020 7020 2221 BLAVOD BLACK: Reduces Operating Loss; Expects to Breakeven Soon --------------------------------------------------------------- Blavod Black Vodka plc, which owns and sells Blavod, said it continues to achieve global sales success. These are the highlights for the year ended March 31, 2003: (a) Turnover increased by 32% (b) Production efficiencies enable significant gross margin improvement (c) Operating loss reduced by 51% (d) Cash outflow of GBP214,000 in 2002/3 - substantially lower than prior year (e) GBP1.02 million of cash in Balance Sheet (f) New markets in Russia and Eastern Europe are promising (g) Excellent rate of growth continues in duty free sales Allan Shiach, Chairman, commented: "The benefits of increased sales, improved margins due to production efficiencies and reduced marketing and administration expenses resulted in a halving of our operating loss. Real progress has been made towards breakeven and we are confident that further progress will be made in the year ahead." To See Full Financial Results: http://bankrupt.com/misc/Blavod_Black.htm CONTACT: BLAVOD BLACK VODKA PLC Phone: 020 7352 2096 Richard Ambler, Chief Executive David Wheatley, Finance Director CORDIANT COMMUNICATIONS: No.1 Investor to Seek Debt Rollover ------------------------------------------------------------ Active Value, the largest shareholder of Cordiant Communications, might ask the lenders of the company to roll over the firm's borrowings for three years rather than write down part of its GBP250 million- (US$403 million) debt, according to the Financial Times. Richard Wheatly, Active Value's candidate for election as chairman, said the offer would depend on getting access to the financial information of the advertising group. Active Value, which owns 14.1% of Cordiant's shares, wants an equity injection that would keep the firm independent, but the advertising group has indicated it would prefer being bought by an advertising deal. Mr. Wheatly, former Jazz FM chief executive, himself picked up the signs saying, "The blinkers are firmly on - their view was that the best solution for this company was to sell it. That argument so far has carried the day with the lenders." According to Mr. Wheatly, Cordiant had refused to supply the working capital report needed to finalize the restructuring plan despite its promise to cooperate with WestLB -- Active Value's adviser -- and provide needed information. Active Value has called a shareholders' meeting to seek the replacement of the board and backing for an equity injection. As for the possible appointment in Cordiant, Mr. Wheatly said: "I don't turn around companies, but I'd like to think I have some skills in giving them a new sense of direction." Cordiant's problems were in its "weak center," he said. "You have fine teams running fine businesses underneath." The report said Stephen Davidson would leave WestLB to become Cordiant's finance director if the Active Value resolutions are passed. Alistair Mackenzie, who was finance director at Jazz FM, would be deputy finance director, according to Mr. Wheatly. "I'd only do it with a strong chief executive," Mr Wheatly said. EQUITABLE LIFE: To Find Ways to Avoid Paying Damages ---------------------------------------------------- Equitable Life plans to avoid paying damages for giving bad advices to clients by appealing against a ruling from the Financial Ombudsman ordering it to compensate former policyholders who received misleading advice from its salesmen. It has until June 22 to contest the adjudications on five "lead" cases, representing the complaints sent to the ombudsman, according to The Telegraph. The claims being reviewed by the ombudsman were those of former policyholders who joined the society after September 1998 and left before the compromise deal to settle Equitable's guaranteed annuity rate liabilities. Clients belonging to this bracket are dubbed "late joiners." Parliamentary Ombudsman Ann Abraham, who is looking at the regulation of Equitable by the Financial Services Authority between January 1999 and December 2000 said: "We hope to publish our review before the parliamentary recess in July." The ombudsman will rule on how much should Equitable Life pay policyholders, once the insurer loses the appeal, according to the report. An Equitable spokesman said: "If the ombudsman sets a level of compensation we do not agree with, we will issue legal proceedings." Equitable Life is also reviewing compensations for former policyholders on a case-by-case basis, and has promised to give compensation if they would, among other conditions, waive any GAR-related claims regarding possible mis-selling, negligence or fraud by the life assurer. Equitable is waving before policyholders eyes compensation payouts capped at 5pc of the value of the funds. Paul Weir, of the Equitable Late Joiners Action Group, described the condition as "a deliberate attempt by the society to discourage people taking their legitimate claims to the ombudsman," according to the report. GAMING INSIGHT: Shares Suspended Due to Financial Uncertainties --------------------------------------------------------------- Shares in Gaming Insight were suspended at 1.07 p each on AIM after the interactive TV gambling company asked to halt trading pending clarification of its financial position. The shares, which had traded as high as nearly 80p in early 2000, consistently went down over the past 12 months. Gaming Insight reported a net loss of GBP6.2 million in its interim results in September. It received another blow two months when its partner Knightsbridge department store Harrods ditched it to re-launch its online casino with a new partner. Gaming raised GBP2 million in extra funding through a share placing to support a joint venture with Victor Chandler to develop a greyhound-racing venture called Red Bet Racing. The move was aimed at securing the future of the company's GoBarkingMad digital TV greyhound racing channel. The group is understood to be currently trying to restructure its balance sheet. Gaming Insight comprises several integrated gaming entertainment businesses including an online casino as well as sports gaming companies. HURLINGHAM PLC: Fails to Recover from Impact of Iraq War, SARS -------------------------------------------------------------- Interim Results Statement for Six Months ended 31 March 2003: Chairman's Statement I am reporting to you on the six-month period ending 31st March 2003. These have been difficult months for the Hotel and Travel industry, during which the decline in volumes and margins occasioned by the terrorist attacks in America on September 11th 2001 have not recovered due to the further damaging impact of the Iraq war and the outbreak of SARS. As a result, Group turnover fell some 18% to GBP666,314 (2002: GBP813,689) resulting in a loss for the half-year of GBP149,430 (2002: loss GBP135,347). The outlook for the Group's international hotel booking subsidiary, Custom Tours Ltd., remains uncertain. Although the winter months to 31st March now under review are normally the months of least activity, the travel and hotel booking industry is not yet showing signs of recovery. The Board has therefore implemented a program of cost cutting in order to mitigate the effect of these reduced volumes. At the same time, it is exploring joint venture initiatives to reduce overhead further and increase both volumes and product offerings. Turning to our Hotel operating company, Bettagrade Ltd., the company's hotel in Perth has continued to consolidate its performance to the extent that at 31st March 2003, year to date occupancy was 66% (2002: 63%) and average room rate was GBP38.83 (2002: GBP36.43). Early indications are that the reduction in international travel may benefit the domestic UK Tourist industry and the management team is looking forward to seeing increased volumes during the summer tourist season. During the period, the Board undertook the refurbishment of two of the Group's residential properties in Chelsea and Fulham. This program inevitably led to reduced rental receipts during the refurbishment work. This program has now been satisfactorily completed and the Board considers that the properties are in a condition to maximize their potential either for rental or sale. The refurbishment of the remaining flats will take place as they become vacant. Charles Llewellyn Chairman To See Financial Statements: http://bankrupt.com/misc/Hurlingham.htm INTERACTIVE DIGITAL: Turnover Improvement Cuts Losses ----------------------------------------------------- A sharp increase in turnover enabled Interactive Digital Solutions to narrow its pre-tax loss in the six months to March 31, 2003 from GBP713,494 to GBP545,498. The group's turnover increased from GBP45,323 to GBP165,741. The group's NHS business partner has already started the rollout of its bedside entertainment system, but due to a previous delay, the group has continued to be loss-making. The losses reduced shareholders funds to less than half the company's paid up share capital. This prompted the firm to call an extraordinary general meeting to remedy the situation. The group also announced it has placed 15,200,000 new ordinary shares in the company with investors at 2.5 pence per share to raise GBP380,000 before expenses. The money raised from this will be used to sustain the group until sales begin to generate revenue and cash. "We anticipate that this will be well before we next report," Chairman Dorian Marks said. KM GROUP: Sale Negotiations End Without Deal -------------------------------------------- Negotiations regarding the sale of Harris Tweed fell through after the firm's possible buyer balked at KM Group's GBP5 million asking price, according to The Scotsman. But Derek Murray, owner of KM Group, said he called off the deal because Michael Clayton-Gale, a former chief executive of Coburg Coffee, had failed to raise the required capital. KM Group, which represents 97% of the industry, was put on the market last August. Mr. Clayton-Gale was given an exclusivity deal for two and a half months to pursue the deal, but the contract has now expired. Mr. Murray said: "I'm not going to keep the for sale sign up as I don't think it's good for morale, but if an offer does come along we will certainly look at it." Mr. Clayton-Gale declined to comment, according to the report, putting further uncertainty on the exact reasons why the transaction failed. But the report noted that KM Group, which has a workforce of 100 in two mills on Lewis, and commissions more than 200 self-employed home weavers, has been in decline for several years now. The Scotsman cited a source on Lewis saying, "People obviously do not think the company is worth the money." Previously, however, the asset for sale attracted about 100 inquiries. OASIS HEALTHCARE: Failed Acquisitions Spill Red Ink on Results -------------------------------------------------------------- Dental practice group Oasis Healthcare reported a pre-tax loss of GBP2.3 million, up significantly from a loss of GBP13,000 from the previous year after accounting for the costs of integrating Dencare and Ora. Oasis Healthcare, which operates the country's biggest chain of dental shops, acquired the Dencare and Ora dental groups last year as well as 17 independent practices. It incurred a GBP900,000 charge covering redundancy payments to Dencare and Ora staff and the costs of closing their head offices in Tunbridge Wells and Victoria in London. GBP500,000 was also charged at one time for operating the offices from acquisition to closure. These operations have been moved to the company's head office in Norwich. Still, Oasis Healthcare Chairman Ron Trenter remains confident about the future: "The majority of cost-reduction initiatives deriving from consolidating the Dencare and Ora businesses with Oasis, to secure both purchasing improvements and organizational savings, are now largely complete and will deliver significant benefits during the current year." TELEWEST COMMUNICATIONS: Trading Still in Line with Expectations ---------------------------------------------------------------- Telewest Communications plc announces its Annual General Meeting in London and confirms that the company's current trading continues to be in line with expectations. "The Company continues to perform in accordance with its strategy with success in broadband, tight cost control and a focus on customer service. In line with our first quarter results, we continue to see strong contribution margins, reduced capital expenditure and an improving customer profile with further growth in triple play customers." ***** On September 30, 2002, Telewest Communications plc announced that it had reached a preliminary agreement relating to its balance sheet restructuring with an ad hoc committee of bondholders. The Company has since made significant progress towards implementing the Preliminary Restructuring Agreement and, as a result, is close to publicly filing the documentation necessary to effect the Restructuring. CONTACT: TELEWEST COMMUNICATIONS PLC Jane Hardman, Director of Corporate Communications Phone: 020 7299 5888 CITIGATE DEWE ROGERSON Phone: 020 7638 9571 Anthony Carlisle Phone: 07973 611 888 ********* 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. Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors. Copyright 2003. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. 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