/raid1/www/Hosts/bankrupt/TCREUR_Public/030630.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Monday, June 30, 2003, Vol. 4, No. 127
Headlines
E S T O N I A
AS KLEMENTI: Posts Higher Q1 Net Loss Due to Retail Slump
F I N L A N D
BENEFON OYJ: Shareholders Approve Restructuring Plan in EGM
BENEFON OYJ: Court Accepts Reorganization Application
FINNAIR OYJ: Adds Flights to China as SARS Epidemic Subsides
F R A N C E
VIVENDI UNIVERSAL: U.S. Billionaire to Boost MGM Bid
G E R M A N Y
EUROBIKE AG: Banks Cancel EUR30 Million Funding Commitment
MANNHEIMER AG: Troubled Life Business to Go Under Protection
WESTLB AG: Fitch Individual Ratings on Watch Negative
I R E L A N D
ELAN CORPORATION: Wants Deadline for Annual Report Extended
ELAN CORPORATION: Ratings Cut to 'CCC', Placed on Watch Negative
I T A L Y
FIAT SPA: 'BB+' Long-term Rating on CreditWatch Negative
N E T H E R L A N D S
FORTIS N.V.: Mulls Options for Financial Services Unit
P O L A N D
ELEKTRIM S.A.: Pays Second Installment of Loan to Bondholders
S P A I N
EMPRESA NACIONAL: S&P Expects Debt to Swell After Privatization
S W E D E N
JM AB: To Lay off 250 Employees
TELIASONERA: Redemption Price of Sonera Shares Set at EUR5.78
S W I T Z E R L A N D
SWISS INTERNATIONAL: Downsizing Threatens Jobs at SR Technics
ZURICH FINANCIAL: Ships Invest Bank Products to AIG Private Bank
U N I T E D K I N G D O M
CORUS GROUP: Long-term Rating Lowered to 'B'; Outlook Negative
EBOOKERS PLC: Firm Will Achieve Cost Synergy Targets, Says Chief
ELDRIDGE POPE: Dumps Merger Bid; Decides to Get Back to Basics
LE MERIDIEN: Progress in Talks Eases Threat of Administration
PPL THERAPEUTICS: Likely to be Broken Up or Sold, Says Report
SMF TECHNOLOGIES: Group Turnover Down 9%, Says Chairman
SMG PLC: Successfully Defends Suit Brought by Chris Evans
SOPHEON PLC: Discloses Sale Agreement Involving U.S. Business
SYNGINCE PLC: Shares Suspended Pending Possible Refinancing
TADPOLE TECHNOLOGY: Accepts Former Affiliate's Cash Settlement
TRINITY MIRROR: Posts Trading Update for July Interim Results
VIRTUE BROADCASTING: Sells U.K. Media Services Division
WS ATKINS: Net Debt Widens by GBP14.7 Million
WS ATKINS: Names Keith Clarke New Chief Executive
*********
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E S T O N I A
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AS KLEMENTI: Posts Higher Q1 Net Loss Due to Retail Slump
---------------------------------------------------------
The unaudited consolidated group net sales of AS Klementi in the first
quarter of 2003 were EEK31.8 million (EUR2.0 million) and net loss amounted
to EEK9.1 million (EUR0.6 million). In the same period of the previous
year, the net sales were EEK32.4 million (EUR2.1 million) and net loss
EEK4.6 million (EUR 0.3 million). As of March 31, 2003, the group employed
564 people. During the year, the number of the employees decreased by 11.5%,
i.e. by 73 persons.
SALES ANALYSIS
The sales breakdown according to the activities in the first quarter was as
follows:
NET SALES 2003 2002 2003 2002 y-o-y growth
EEKm EEKm EURm EURm 03/02
Apparel sales 25.9 21.1 1.7 1.4 22.5%
Subcontracting and other 5.9 11.3 0.3 0.7 -47.3%
TOTAL 31.8 32.4 2.0 2.1 -1.8%
Compared to the same period of the previous year, the structure of the sales
underwent significant changes. The share of apparel sales increased to
81.3% (65.2% in 2002). The greatest increase, by 2.2 times, i.e. EEK5.6
million (EUR0.4 million) occurred in the wholesale of apparel in the Nordic
countries.
The retail share in the apparel sales was 50% in the first quarter of 2003.
Compared to the same period of the previous year, the sales per square meter
increased by 4%. This year, the company plans to acquire 100% of the retail
company SIA Vision. SIA Vision rents two sales premises in Riga and has a l
ong history of selling Klementi products. Currently, AS Klementi has no
participating interest in the company and the sales of these stores are not
therefore reflected in the retail sale results.
The decrease in the share of subcontracting was caused by the company's
increased need to put an additional load on manufacturing by producing new
collections under its own trademarks. Thus, the decrease in the work in
progress and finished goods reserves of the company remained less
significant in the first quarter of 2003 than in the previous year, and
revenue increased by 11.5%.
The subcontracting and other sales in the first quarter of 2002 included
revenue from P.T.A. Group OY in amount EEK6.0 million.
PROFIT ANALYSIS
Net loss in the first quarter of 2003 amounted to EEK9.1 million (EUR0.6
million). The net result involved one-off expenditures in the amount of
EEK2.5 million (EUR0.16 million). Loss from ordinary business activities
was caused by a lower profitability in retail. In January and February
retail sales dominated the collections from the previous periods with a
lower mark-ups. During the first quarter of 2003, two inefficient shops
were closed down and work was continued on the development of the new retail
concept. In May this year, two new stores in accordance to the new concept
were opened in Tallinn (Kristiine Centre) and
Riga (Origo Centre).
The one-off factors affecting the activities included the following.
Since the beginning of this year, the principle employed for the calculation
of the cost price (warehouse price) of the company's own production has
become more conservative. The cost price of products no longer includes
production development costs. The negative impact of the changes in the
calculation principle on the results of the first quarter of 2003 amounted
to EEK1.0 million (EUR 0.07 million). The increase in the share of the
products manufactured this year will reduce the impact of the changes in the
calculation principle on the financial results. The optimization of the
demand for workforce, commenced past year, was continued in the first
quarter of 2003. The redundancy costs amounted to EEK0.4 million (EUR 0.03
million) in the period.
Additional loss of EEK1.1 million was accounted from last year's wholesale
in Latvia and Lithuania.
BALANCE SHEET ANALYSIS AND RATIOS
The consolidated balance sheet total of AS Klementi was EEK115.0 million
(EUR7.4 million) as of March 31, 2003. In the assets of the balance sheet,
the stocks decreased by EEK4.8 million (EUR0.3 million).
The inventory turnover was 4.8 in the first quarter of 2003, marking an
improvement by 1.5 points over the year (3.3 in 2002).
The key financial ratios of AS Klementi group were:
1Q 2003 1Q 2002
year-over-year sales growth -1.8% 25.3%
apparel sales share in total sales 81.3% 65.2%
inventory turnover (adjusted to year) 4.8 3.3
[net sales/average inventory]
liquidity ratio 0.35 0.43
[(current assets - inventories)/current liabilities]
current ratio 0.79 1.08
[current assets/current liabilities]
EBIT margin -24.8% -10.6%
[operating profit/net turnover]
net margin -28.7% -14.1%
[net profit/net turnover]
To See Full Financial Release:
http://bankrupt.com/misc/Klementi.pdf
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F I N L A N D
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BENEFON OYJ: Shareholders Approve Restructuring Plan in EGM
-----------------------------------------------------------
The Extraordinary General Meeting of Benefon Oyj on June 26, adopted in its
meeting the income statement and the balance sheet of the company from the
financial period January 1 to December 31, 2002. The Extraordinary General
Meeting resolved that no dividends will be paid from the financial period,
which terminated December 31, 2002.
In addition, the Extraordinary General Meeting resolved to raise the share
capital by a directed share issue and by issuing a convertible bond loan on
equity terms.
(a) Confirming the annual account and deciding on measures for
handling the loss according to confirmed annual accounts
The Extraordinary General Meeting of Benefon Oyj adopted in
its meeting the income statement and the balance sheet of
the Company from the financial period January 1 to December
31, 2002 on the condition that the Turku district court
shall confirm a reorganization program as a result of
reorganization applied for according to which the
continuation of the operations shall be guaranteed. The
Extraordinary General Meeting resolved that no dividends are
paid from the financial period, which terminated December
31, 2002
(b) The directed share issue
The Extraordinary General Meeting resolved according to the
proposition of the Board of Directors to raise the share
capital by the directed share issue in deviation from the
pre-emptive subscription right of the shareholders. The
share capital of the company is raised by a maximum of
EUR2.988.744,22 by offering a maximum of 8.885.133 new
investment shares of the company, each with a book parity of
EUR0.34 (not the exact value) for subscription by 37
creditors of the company.
The issue was implemented as a share issue via book
building, where the debtors and the investors named by the
company were given a chance to submit subscription
commitments during the receipt period of the offers from
June 9 to June 24, 2003.
More details linked with the directed share issue have been
given in an earlier bulletin of the Company dated June 6,
2003.
The Extraordinary General Meeting confirmed the allocation of the
subscription rights as follows:
Subscriber Shares Subscription
price EUR
EBV Elektronik GmbH 2 400 000 816 000,00
VARMA-SAMPO 1 909 291 649 158,94
KOY Langaton 1 030 716 350 443,44
Icecapital Pankkiiriliike Oy 670 993 228 137,62
TTPCOM Ltd. 352 795 119 950,30
Powerfinn Oy 298 773 101 582,82
DA-Design Oy 280 839 95 485,26
Siemens AG 229 857 78 151,38
Datacasa Law Offices Oy 225 038 76 512,92
R & K Electronics AB 188 545 64 105,30
Insmat Akku Oy 123 406 41 958,04
IF Vahinkovakuutusyhtio Oy 124 489 42 326,26
Oy TML Leading Network
International Ltd 121 748 41 394,32
Solagem Oy 85 386 29 031,24
Exchange & Broker
Law Service Oy 75 963 25 827,42
Oy Cumulator Ltd 55 023 18 707,82
Novacast Oy 66 602 22 644,68
Hotas Holdings Ltd 62 313 21 186,42
VLSI Solution Oy 48 486 16 485,24
M Power Batteries Ltd 52 720 17 924,80
Perlos Oyj 51 478 17 502,52
Yrityssiivous K. Koski 48 882 16 619,88
Divitech S.p.A. 43 938 14 938,92
u-blox AG 43 014 14 624,76
Syspex Oy 38 809 13 195,06
Orbis Service Oy 32 380 11 009,20
Aspecs Oy 28 912 9 830,08
Polimoon Oy 25 187 8 563,58
Sonicare Solutions Inc 24 933 8 477,22
Nieminen Jorma 24 805 8 433,70
CQM Finland r.y. 24 733 8 409,22
Salon Varastohotelli Oy 23 543 8 004,62
Arrow Finland Oy 21 449 7 292,66
Scanpiiri Oy 19 001 6 460,34
Lynx Racing Oy 18 104 6 155,36
Assy Oy 9 000 3 060,00
Lexia Oy 3 982 1 353,88
In total: 8 885 133 3 020 945,22
The subscription period begins after the shareholders'
meeting on June 26, 2003 and ends on June 27, 2003. For
the creditors, the shares shall be subscribed with
subscription commitment, which also serves as the
subscription list. The creditors shall pay the subscription
price by using set-off. The Board of Directors shall accept
all the subscriptions made in this way and according to the
terms and conditions of the subscription.
(c) The issuance of Convertible Bond Loan on equity terms
The Extraordinary General Meeting resolved to raise the
share capital of the Company by issuing the convertible bond
loan on equity terms (Convertible Bond Loan 2003A). The
company's share capital is raised by the maximum of
EUR1.731.579,15 by offering the convertible bond loan on
equity terms with a maximum principal of EUR1.750.237,42 for
subscription by the 12 creditors of the Company.
Transferable convertible bonds with a principal value of at
least one (1) euros shall be given for the Loan. The
Convertible Bonds may be converted in total into a maximum
of 5.147.751 new investment shares of the Company each with
a book parity of EUR0.34 (not the exact value).
More details linked with the issuance of the convertible
bond loan have been given in an earlier bulletin of the
Company dated June 6, 2003.
The Extraordinary General Meeting confirmed the allocation
of the subscription rights of the Loan as follows:
Subscriber Conversion right/shares Amount
of Loan EUR
VARMA-SAMPO 1 909 291 649 158,97
Teleca Limited 1 522 610 517 687,43
EBV Elektronik GmbH 959 552 326 247,98
Cetecom GmbH 482 495 164 048,49
Hansaprint Oy 119 084 40 488,56
Laakarikeskus Mehilainen Salo 41 442 14 090,44
Sapa Profiilit Oy 31 992 10 877,58
Taideteollinen Korkeakoulu 21 122 7 181,62
Supertex Inc. 17 683 6 012,36
Memec Finland Oy 15 644 5 319,26
Å & R Carton Oy 13 846 4 707,89
Oy Cumulator Ltd 12 990 4 416,84
In total: 5 147 751 1 750 237,42
The subscription period of the Convertible Bond Loan 2003A
begins on June 26, 2003 and ends on June 27, 2003. The
Board of Directors of the Company shall decide upon the
acceptance of the subscriptions.
The creditors shall pay for the subscriptions by setting off
the matured balance of the debt.
Convertible bonds shall be given for the Loan, once
subscriptions have been registered to the trade register.
The Loan is not issued in the book entry system.
The Extraordinary General Meeting resolved to authorize the Board of
Directors to decide on all other matters and practical measures relating to
the Loan and the increase of the share capital as a result of the possible
conversion with the convertible bonds.
BENEFON OYJ: Court Accepts Reorganization Application
-----------------------------------------------------
The Turku court of first instance decided this morning, June 26, 2003, to
commence the reorganization proceedings of Benefon Oyj on the basis of the
reorganization application filed by the company on April 24, 2003. Attorney
at law Mr. Sakari Sorri was appointed as reorganization receiver.
Benefon has received subscription commitments for the directed share and
convertible bond issue announced on a bulletin of June, 2003 from 46
creditors during the offer period from June 9 to June 24, 2003. Total
amount of commitments for share subscriptions was EUR3,020,945.22 and for
convertible bond loan on equity terms EUR1,750,237.42. Total amount of
received subscription commitments was thus EUR4,771,182.64. The Board of
Directors shall propose to the Extraordinary Shareholders' Meeting of June
26, 2003 the subscription right be granted according to the subscription
commitments.
CONTACT: BENEFON OYJ
Jukka Nieminen, President
Phone: +358-2-77400
Home Page: http://www.benefon.fi
FINNAIR OYJ: Adds Flights to China as SARS Epidemic Subsides
------------------------------------------------------------
Finnair is opening Shanghai as its new destination at the beginning of
September. Flights to Shanghai will be operated non-stop three times a week
on Tuesday, Thursday and Saturday from Helsinki with return flights on
Wednesday, Friday and Sunday. Finnair is also adding a third frequency to
its Beijing route from the start of August. As of August, flights will be
operated from Helsinki on Mondays, Wednesdays and Fridays with return
flights on Tuesdays, Thursdays and Saturdays. A fourth frequency to Beijing
will be added at the beginning of
September.
"At that point Finnair will have 26 weekly services to the most
important cities in Asia," says Finnair VP Corporate Communications Christer
Haglund.
Finnair will return to normal three weekly frequencies to Hong Kong at the
start of July. At the same time, the Bangkok route will also return to
daily frequencies. Flights from Bangkok continue to Hong Kong three times a
week on Mondays, Wednesdays and Fridays. On other days the flights carry on
to Singapore.
Finnair had to cut back its Asian operations in May because of a drop in
demand due to the SARS epidemic. As travel advisories have been lifted,
interest in travel to the area is growing again. Starting September,
Finnair's Asian destinations are Tokyo, Osaka, Beijing, Shanghai, Hong Kong,
Bangkok and Singapore.
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F R A N C E
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VIVENDI UNIVERSAL: U.S. Billionaire to Boost MGM Bid
----------------------------------------------------
Hollywood movie studio Metro-Goldwyn-Mayer is getting help on its cash offer
for the U.S. entertainment assets of Vivendi Universal, according to the
Financial Times.
The report said, Kirk Kerkorian, the billionaire investor, has offered to
put US$2 billion worth of equity into what sources said
Metro-Goldwyn-Mayer's more than US$11 billion- bid for Universal's movie
studio, theme parks, television production group and USA Network and Sci-Fi
cable channels.
Mr. Kerkorian is offering the amount via its holding company Tracinda. He
has also reportedly gained agreement with private equity investors,
including Providence Equity Partners and Morgan Stanley Capital Partners.
Observers previously thought Metro-Goldwyn-Mayer does not have the financial
resources to compete with larger bidders. Metro-Goldwyn-Mayer is believed
to be in need of financial backing, with its market capitalization just over
US$3 billion, in order to gain footing on its planned acquisition.
Executives of Metro-Goldwyn-Mayer expect the merger to generate cost savings
as both combine their large film libraries.
In addition to the equity injection, the company has lined up debt financing
worth US$7 billion from Bank of America and Morgan Stanley, according to the
report. Moreover, it has offered Vivendi the option of retaining a minority
stake in the merged company, with an option of selling the holdings to
outside investors if Vivendi decides to take as much cash as possible to
allow it to meet its debt reduction targets.
Other participants in the auction include a group led by former Seagram CEO
Edgar Bronfman; a group led by Marvin Davis, the oil billionaire; John
Malone's Liberty Media; and NBC, the media arm of General Electric.
Vivendi's board is set to come up with a shortlist of bidders for the second
round of the auction.
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G E R M A N Y
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EUROBIKE AG: Banks Cancel EUR30 Million Funding Commitment
----------------------------------------------------------
Two of the banks that promised to recapitalize Eurobike AG have terminated
their commitment to provide the company with EUR30 million in funding. The
banks are among the European financial institutions that pledged to
contribute around EUR139 million of credit facilities. The information
follows the company's warning that there will be an extraordinary
termination of all credit lines within Eurobike's pool of banks.
Eurobike holds investments in retail companies in the field of motorbike
clothing and accessories. Its brands are POLO, Hein Gericke and GoTo
Helmstudio. Its subsidiary Intersport Fashions West operates in the U.S.
market. It is responsible for design and distribution for Hein Gericke and
First Gear, as well as for the design of the Harley-Davidson clothing line.
MANNHEIMER AG: Troubled Life Business to Go Under Protection
------------------------------------------------------------
German regulator BaFin said Mannheimer Holding AG's troubled life business,
Mannheimer Lebensversicherung AG, will be closed to new business and
sheltered under Protector, the rescue company set up by the insurance
industry last year.
The life unit had gross premium income of EUR344 million (US$393 million)
last year. It had unrealized losses on stock investment of EUR238 million
at the end of March. These account for most of the holding company's
EUR63.6 million (US$72.8 million) losses in the first quarter.
Mannheimer Holdings fell victim to three years of declining stock prices
that eroded investment income. It was forced to write down the value of
stock holdings. Last week, the firm received another blow when the planned
injection of new capital in the company failed to come through.
Mannheimer's shareholders are Austrian insurer Uniga Versicherunger, which
holds a 13% stake, Munich Re, with 10%, and Swiss Re, Frankona Re, Cologne
Re, and Gerling's reinsurance business, which all hold less than 5%.
WESTLB AG: Fitch Individual Ratings on Watch Negative
-----------------------------------------------------
Fitch Ratings has revised the Rating Watch status of the 'C/D' Individual
rating of WestLB AG to Negative from Evolving and stated that the Rating
Watch Negative is now in place for Landesbank Nordrhein Westfalen's
(LBNRW's) Individual rating, also at 'C/D'. The rating action follows the
announcement by WestLB AG that two members of WestLB AG's top management
will leave the bank as a result of the outcome of the investigation by the
German banking authority (BaFin - Bundesanstalt fur
Finanzdienstleistungsaufsicht) into the BoxClever transaction. The 'AAA'
Long-term ratings, 'F1+' Short-term ratings and Support ratings of '1' are
affirmed for both banks. The Outlook for the Long-term ratings remains
Stable.
The Rating Watch Negative reflects uncertainties about the future management
and the strategy of WestLB AG and lack of clarity on recent asset quality
problems, in particular WestLB AG's principle finance activities in London.
WestLB AG's Individual rating takes into account its poor profitability,
higher than Landesbank average credit and market risks and its weak level of
capital, in particular in light of the EUR1.7 billion loss for 2002.
Following the outcome of the BaFin investigation, the agency is informed
that centralized credit risk monitoring procedures will be strengthened.
Fitch is now waiting for new management to be appointed to the bank to
determine its strategic direction. Unless details on these matters come to
light within the next few months, WestLB AG's Individual rating is likely to
be downgraded by one notch to 'D'.
As noted above, WestLB AG's Individual rating was on Rating Watch Evolving.
Fitch considered that improved capitalization following a capital injection
in early 2003 could have resulted in an upgrade of the Individual rating if
the bank were able to show that it was managing its credit risk
appropriately, and had a business plan in place that would carry it through
the current turbulent economic environment and deliver decent profitability
in the future. Any rating action affecting WestLB AG also affects the
ratings of its 100% owner LBNRW. WestLB AG represents around 80% of the
LBNRW group's assets, but all liabilities it incurs up until 18 July 2005,
provided that they mature before end-2015, are guaranteed directly by the
State of North Rhine Westphalia (43.2%), the regional association of the
Rhineland (11.7%), the regional association of Westphalia-Lippe (11.7%), the
savings and giro association of the Rhineland (16.7%) and the savings and
giro association of Westphalia-Lippe (16.7%). Given that LBNRW is itself
owned and guaranteed by the State of North Rhine Westphalia as well as these
associations, it is unlikely that it will be called upon to support its
subsidiary, should the need arise. As a consequence LBNRW manages WestLB AG
as an equity investment rather than as an integrated part of its activities.
The Long-term, Short-term and Support ratings of WestLB AG and LBNRW are
based on the strength of the support mechanisms provided by their ultimate
owners in the form of Anstaltslast and Gewaehrtraegerhaftung and by Fitch's
'AAA' rating for North Rhine Westphalia. These state guarantees cover all
obligations of the two banks except those entered into between 19 July 2001
and 18 July 2005 and which mature after end-2015.
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I R E L A N D
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ELAN CORPORATION: Wants Deadline for Annual Report Extended
-----------------------------------------------------------
Elan Corporation, plc (NYSE: ELN) on Thursday announced that it intends to
file with the Securities and Exchange Commission (SEC) a Form 12b-25 to
extend to July 15, 2003, the filing date for Elan's Annual Report on Form
20-F for fiscal 2002. The delay in filing is the result of current
discussions among Elan and the Office of Chief Accountant and the Division
of Corporation Finance of the SEC regarding the appropriate accounting
treatment, under U.S. Generally Accepted Accounting Principals, for Elan's
qualifying special purpose entities, Elan Pharmaceutical Investments, Ltd.
(EPIL I), Elan Pharmaceutical Investments II, Ltd. (EPIL II) and Elan
Pharmaceutical Investments III, Ltd. (EPIL III).
The delay in filing the 2002 Form 20-F may cause a technical default under
certain of Elan's debt covenants that require it to provide audited
consolidated financial statements to the holders of the EPIL II and EPIL III
notes and Elan's 7 1/4% Senior Notes.
G. Kelly Martin, President and Chief Executive Officer, said: "Elan is fully
cooperating with the SEC and is pursuing all available options for quickly
resolving the SEC discussions and for addressing the impact of those
discussions on Elan's outstanding debt." He continued, "At Elan, we are
dedicated to continuing our efforts to deliver life-changing solutions that
enable people to live healthier, longer lives. As one of the world's
leading companies in research and development for Alzheimer's disease,
multiple sclerosis, Crohn's disease and severe pain therapeutics, we take
seriously our commitment to meet the needs of patients and their families.
With such obligations to the world community at large, as well as our
obligations to our shareholders and employees, we remain highly focused on
reaching resolution with the SEC in a timely manner."
Absent Elan curing the technical defaults under its debt covenants by filing
with the SEC its 2002 Form 20-F or absent receiving waivers from the
applicable note holders, these defaults would become events of default on
July 30, 2003 under the EPIL II and EPIL III notes and on September 14, 2003
under the Senior Notes, which could result in the requisite holders of those
notes declaring the applicable debt to become immediately due and payable.
In the event that the requisite holders of the EPIL II notes, the EPIL III
notes or the Senior Notes determined to accelerate their debt in light of
the technical nature of the default, such acceleration would trigger the
cross-acceleration provisions of all of Elan's other outstanding
indebtedness, including its Liquid Yield Option Notes. Elan would not be
able to satisfy the acceleration of a significant amount of its outstanding
debt.
The proper accounting treatment for EPIL I, EPIL II and EPIL III is also
part of the previously announced investigation by the Enforcement Division
of the SEC. No assurance can be given as to any issues that may arise as a
result of that investigation.
Elan is focused on the discovery, development, manufacturing, sale and
marketing of novel therapeutic products in neurology, pain management and
autoimmune diseases. Elan shares trade on the New York, London and Dublin
Stock Exchanges.
ELAN CORPORATION: Ratings Cut to 'CCC', Placed on Watch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate credit
rating on Elan Corp. PLC to 'CCC' from 'B-'. Standard & Poor's also lowered
all of its other ratings on Elan, a specialty pharmaceutical company, and
its affiliates, and the ratings have been placed on CreditWatch with
negative implications.
The actions follow Dublin, Ireland-based Elan's announcement that it is
filing with the Securities and Exchange Commission (SEC) for an extension to
file its Form 20-F 2002 Annual Report by July 15, 2003. The delay is
related to the company's ongoing discussions with the SEC over appropriate
accounting treatment, under U.S. Generally Accepted Accounting Principals,
for the company's various special purpose entities (Elan Pharmaceutical
Investments I, EPIL II, and EPIL III).
"The delay in filing may cause the company to be in technical default of its
debt covenants, raising the possibility that debt holders can demand
immediate repayment," said Standard & Poor's credit analyst Arthur Wong.
"Without a waiver, the $572 million in outstanding EPIL II and EPIL III debt
would be considered in default on July 30, 2003, and Elan's US$650 million
in senior unsecured notes would be in default on Sept. 14, 2003."
Elan is already facing a possible put on US$494 million in outstanding LYONs
securities at the end of 2003. As of March 31, 2003, the company had US$984
million in on-hand cash and has received net proceeds of US$315 million from
the recently closed sale of its primary care business. Elan will not be
able to meet its debt obligations given an acceleration of its debt
maturities.
Standard & Poor's will continue to monitor developments in resolving the
CreditWatch.
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I T A L Y
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FIAT SPA: 'BB+' Long-term Rating on CreditWatch Negative
--------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB+' long-term
corporate credit rating on Italy-based industrial group Fiat SpA on
CreditWatch with negative implications due to an increased likelihood that
the cash-draining Fiat Auto division will remain in the group.
At the same time, Standard & Poor's affirmed its 'B' short-term corporate
credit and commercial paper ratings on Fiat and related entities. On June
26, 2003, Fiat's management announced increased efforts to improve the
profitability and efficiency of Fiat Auto over the medium term.
"Standard & Poor's believes this plan reduces the likelihood that Fiat will
lower its participation in Fiat Auto as early as 2004," said Standard &
Poor's credit analyst Virginie Casin.
Standard & Poor's had previously assumed that Fiat would exercise its put
option to General Motors Corp. (BBB/Negative/A-2) or, through other means,
reduce its stake in Fiat Auto, which is the main source of Fiat's
consolidated negative free operating cash flows. The group had EUR28.9
billion (US$33.1 billion) of total on-balance-sheet financial debt at March
31, 2003. Management has stated that this figure will decline to less than
EUR23.6 billion when the deconsolidation of Fidis, Fiat Auto's customer
financing arm, takes effect.
In earlier statements this year, Standard & Poor's had warned that "should
Fiat Auto remain in the group beyond 2004, Standard & Poor's would be
extremely skeptical about the likelihood of positive free cash flows before
2006, and would have serious concerns about the sustainability of the
current ratings."
Standard & Poor's aims to resolve the CreditWatch status on Fiat in the
coming weeks. The CreditWatch review will focus on the extent to which the
group's restructuring and financial measures will help offset the negative
effect of continued Fiat Auto ownership.
=====================
N E T H E R L A N D S
=====================
FORTIS N.V.: Mulls Options for Financial Services Unit
------------------------------------------------------
Fortis announces that it is looking into various future scenarios for GWK,
mainly because it wishes to concentrate more explicitly on its core
business. Fortis is exploring three options for GWK: disposal, integration
into Fortis, and a stand-alone existence.
For more than 75 years, GWK has been the specialist in foreign currency and
cash services. When the euro was introduced, GWK carried out a far-reaching
reorganization. The company's strategy is aimed at increasing its market
share in a contracting market.
GWK offers customers financial services like exchanging money; it also sells
tickets, books hotels, offers travel services and sells mobile telephones.
GWK has around fifty branches at the larger NS Railway stations in the
Netherlands, at national borders, at Schiphol airport and in a number of
major cities.
CONTACT: FORTIS N.V.
Investor Relations
Brussels: 32 (0) 2 510 53 37
Utrecht: 31 (0) 30 257 65 46
Home Page: http://www.fortis.com
===========
P O L A N D
===========
ELEKTRIM S.A.: Pays Second Installment of Loan to Bondholders
-------------------------------------------------------------
The Management Board of Elektrim SA announces that on June 26, 2003 it has
made a transfer to the escrow account in Bank Handlowy w Warszawie SA of the
amount of EUR32 million together with interest. The transfer is for the
second installment of the principal of bonds, pursuant to the provisions of
the agreement with bondholders dated November 15, 2002. The money
transferred comes from the repayment of the loan extended to ZE PAK SA on
November 6, 2002. Elektrim S.A. has now satisfied all its obligations and
therefore, the registered and civil pledge on the shares in Patnow II Sp. z
o.o. will be released.
=========
S P A I N
=========
EMPRESA NACIONAL: S&P Expects Debt to Swell After Privatization
---------------------------------------------------------------
Standard & Poor's Ratings Services said it had lowered its long-term
corporate credit rating on Spanish highway concessionaire Empresa Nacional
de Autopistas S.A. to 'BB+' from 'AA+'.
At the same time, the rating was removed from CreditWatch, where it had been
placed on May 30, 2003, following the announcement that a consortium led by
Spanish construction company Sacyr-Vallehermoso (not rated), and supported
by Banco Santander Central Hispano, S.A. (A/Positive/A-1) and a group of
Spanish savings banks, had won a bid for the privatization of Empresa
Nacional de Autopistas. The outlook is positive.
The downgrade reflects Empresa Nacional de Autopistas's new ownership
structure and the expected addition of EUR1.2 billion of debt at the level
of the parent and acquisition vehicle, Newco. The finance structure used in
the transaction currently does not insulate Empresa Nacional de Autopistas's
cash flows from Newco. As a result, on a consolidated basis, the financial
profile of Newco and Empresa Nacional de Autopistas is aggressive.
The consolidated creditworthiness of Empresa Nacional de Autopistas and
Newco is markedly speculative grade. Credit separation between Empresa
Nacional de Autopistas and Newco is incomplete at this stage (the finance
structure is still under review).
"While there is some ring fencing between Empresa Nacional de Autopistas and
Newco, particularly with respect to certain features of the Spanish legal
system and highway regulatory framework, effective investment-grade level
protection of existing Empresa Nacional de Autopistas bondholders still has
to be demonstrated," said Standard & Poor's credit analyst Jean-François
Veron.
In particular, there does not appear to be sufficiently strong protective
features to prevent potentially negative interference by Newco, including
the use of Empresa Nacional de Autopistas's cash flows and assets to stave
off a crisis at the parent level.
Prior to the completion of the acquisition, Empresa Nacional de Autopistas's
liquidity is expected to be adequate, supported by the proceeds from its
recent EUR193-million bond issue. After the formal acquisition (expected in
July 2003), the company's liquidity will be further reinforced by loans to
be made available at the concessionaires' level as part of a financing
package related to the acquisition.
"The positive outlook reflects the potential for Empresa Nacional de
Autopistas's new owners to implement measures that better separate Empresa
Nacional de Autopistas's credit quality from that of Newco," Mr. Veron said.
Any upgrade following the implementation of such ring-fencing measures would
not necessarily be limited to one notch.
===========
S W E D E N
===========
JM AB: To Lay off 250 Employees
-------------------------------
Notice on possible layoffs has been filed with the county employment board
in Stockholm. The notice pertains to 250 employees and covers craftsmen as
well as salaried employees. Negotiations with the affected unions will be
initiated after the summer holiday period.
"We are now further adapting our organization to the prevailing market
situation for offices and housing in Stockholm," comments, Johan Skoglund,
CEO of JM. "We are thereby creating readiness for a postponement of a
number of housing projects. As a consequence of this, unfortunately we must
serve notice to 250 people."
In March JM laid off 100 employees, also as a result of the current market
situation.
JM AB is a public limited company listed on the Stockholm Stock Exchange.
JM has around 2,700 employees in Sweden, Norway, Denmark and Belgium, and
sales in 2002 amounted to approximately SEK 9 billion. The company is
Sweden's leading housing developer, and the core business is project
development of residential and commercial properties in central areas of
growth markets. JM's operations are characterized by a focus on quality and
the environment.
CONTACT: JM AB
Goran Malmberg, Head of HR
Phone: +46-8-782 87 85
Mobile: +46-70-606 87 85
Home Page: http://www.jm.se
TELIASONERA: Redemption Price of Sonera Shares Set at EUR5.78
-------------------------------------------------------------
The arbitral tribunal appointed in the redemption proceeding concerning the
shares in Sonera Corporation initiated by TeliaSonera AB, has on June 26,
2003 determined the redemption price to be EUR5.78 per share and the
interest to be paid on the redemption price from March 21, 2003 was set at
5.0% per annum. It is estimated that the redemption price will be paid out
in September 2003 at the latest.
Pursuant to Chapter 14, section 21 of the Finnish Companies Act, the
ownership of all shares in Sonera were transferred to TeliaSonera on March
21, 2003 upon TeliaSonera placing the guarantee approved by the arbitral
tribunal for the payment of the redemption price including interest.
=====================
S W I T Z E R L A N D
=====================
SWISS INTERNATIONAL: Downsizing Threatens Jobs at SR Technics
-------------------------------------------------------------
SR Technics estimates that up to 500 jobs are at risk at its maintenance,
repair and overhaul operations following SWISS' decision to downsize its
fleet. The figure is based on a first broad analysis conducted immediately
after the announcement.
SR Technics Executive Management has conducted a broad analysis of the
parameters of the new SWISS business plan, which were presented Tuesday, and
has attempted to assess their repercussions for the company and its
activities. Since the planned downsizing of the SWISS fleet is sure to
result in lower work volumes for its maintenance and overhaul provider, the
company estimates that up to 500 jobs could be lost. Detailed information
on the future composition and operation of the SWISS fleet still needs to be
obtained, however; and SR Technics now aims to gain a clearer picture by
discussing these issues with SWISS Executive Management at the earliest
possible opportunity.
SR Technics' employees and unions have been informed of the number of jobs
at risk. Discussions with the unions will continue over the next few days.
ZURICH FINANCIAL: Ships Invest Bank Products to AIG Private Bank
----------------------------------------------------------------
Zurich Switzerland will transfer part of the banking products of Zurich
Invest Bank to AIG Private Bank Ltd. and will continue to administer the
remainder. This move means that Zurich Switzerland will focus more on its
core businesses of life and non-life insurance. Zurich Invest Bank AG is
expected to cease operations at the end of 2003.
As part of the strategic reorganization, Zurich Switzerland is focusing on
its insurance business. A highly viable and attractive solution for Zurich
Invest Bank AG products (a wholly owned subsidiary of Zurich Insurance
Company) has been arranged, partly in collaboration with a suitable external
partner, and partly through continued administration within the Group.
A strong external partner has been secured in the form of AIG Private Bank
Ltd., Zurich. The customers of Zurich Invest Bank AG are gaining an
experienced global partner in AIG Private Bank Ltd. All Zurich Invest Bank
AG Savings Accounts, Equity and Investment Plans will continue to be
administered by AIG Private Bank Ltd. from the end of August 2003, largely
at the same advantageous conditions.
The parties have agreed not to divulge any details about the transfer price.
In the future, Zurich Invest Retirement Accounts 3a and Zurich Vested
Benefits Foundation Accounts will be administered by Zurich Switzerland
directly. Mortgages will also continue to be administered within Zurich
Switzerland.
Customers of Zurich Invest Bank AG can continue to conduct their financial
business with Zurich Invest Bank AG and then --depending on the product they
hold -- either with AIG Private Bank Ltd. or Zurich Switzerland. Naturally,
all customer assets will be fully protected at all times.
Zurich Financial Services is an insurance-based financial services provider
with an international network that focuses its activities on its key markets
of North America, the United Kingdom and Continental Europe. Founded in
1872, Zurich is headquartered in Zurich, Switzerland. It has offices in
approximately 60 countries and employs about 68,000 people.
Zurich Switzerland comprises the Swiss operations of the Zurich Financial
Services Group, an insurance-based financial services provider, serving some
1.6 million customers in its core businesses of non-life and life insurance
and pension solutions and employing 6500 people. Zurich Switzerland operates
in the market under the names Zurich, Zuritel, Zurich Invest, Alpina and
Geneva. It is the second largest non-life insurer and the third largest life
insurer in Switzerland.
===========================
U N I T E D K I N G D O M
===========================
CORUS GROUP: Long-term Rating Lowered to 'B'; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term corporate
credit, senior unsecured debt, and bank loan ratings on U.K.-based steel
consortium Corus Group PLC and related entities to 'B' from 'BB-', following
a review. In addition, Standard & Poor's affirmed its 'B' short-term
corporate credit rating on the group and removed its long-term corporate
credit rating on Corus from CreditWatch, where it was placed on March 12,
2003. The outlook is negative.
The senior unsecured debt and bank loan ratings, however, remain on
CreditWatch with negative implications, because Corus is currently
negotiating an extension to its EUR1.4 billion (US$1.6 billion) committed
bank debt facility and it is expected that any new bank lines would be
granted security and rank senior to unsecured debt.
"Standard & Poor's expects European steel prices to fall in the second half
of 2003 and it is likely, therefore, that Corus will only be able to
generate funds from operations or free operational cash flows in line with
what is expected of a 'B' rating category at best," said Standard & Poor's
credit analyst Olivier Beroud. "Furthermore, the strength of the euro will
only partly benefit Corus, as a large part of its operations are based in
the Netherlands, and the expected fall in steel prices in Europe would have
a direct and negative effect on the group's U.K. operations."
The difficult market conditions in the aluminum industry are also likely to
affect Corus' aluminum division and reduce the division's prospects of
significant positive cash flows for the time being, with no short-term
improvement of the aluminum market expected.
Once the terms of the new bank debt are known, Standard & Poor's will
evaluate whether a notching down (up to two notches potentially) of the
existing unsecured debt and bank loan ratings is warranted. Corus currently
has only a small portion of its debt secured.
"Standard & Poor's is concerned about the group's ability to implement a
further restructuring program, renegotiate its bank lines that mature in
January 2004, and resolve the internal dispute that led the group abandoning
the disposal of its aluminum unit," added Mr. Beroud. "We will meet with
the management of Corus in the coming weeks to discuss these various issues
in an effort to resolve the CreditWatch status."
EBOOKERS PLC: Firm Will Achieve Cost Synergy Targets, Says Chief
----------------------------------------------------------------
ebookers plc, the pan-European online travel agency, held its Annual General
Meeting Thursday. At the meeting, Dinesh Dhamija, the CEO and Chairman,
gave an update on the integration of Travelbag Holdings into ebookers plc's
U.K. business.
He reported that ebookers is on track to deliver cost synergy targets and
that early results from the installation of ebookers' booking engines on the
Travelbag and Bridge the World Web sites are encouraging. For example, in
January 2003, before acquisition, 16% of Travelbag's passenger bookings were
Web-enabled, compared to 31% from June 1st to 22nd.
Mr. Dhamija will also report that current trading for the ebookers plc group
is in line with Directors' expectations, and that ebookers will issue its
financial results for the second quarter and half year on August 4.
Mr. Dhamija commented: "ebookers plc entered the FTSE 250 this month, a
further endorsement of the growing strength of our business model. The
integration of Travelbag into our U.K. business is key to group
profitability and I am pleased to be able to report that this process is
making rapid advance in such a short space of time."
ebookers is a leading pan-European online travel agency with websites in 12
European countries -- U.K., France, Ireland, Austria, Germany, Spain,
Holland, Switzerland, Sweden, Denmark, Norway, and Finland. It specializes
in the mid- and long-haul modular leisure segments of the European travel
industry. It also specializes in selling discount merchant fares, which are
negotiated directly with leading travel suppliers in order to help them sell
their excess capacity without damaging their pricing structure and brands.
ebookers has a low-cost BPO facility in New Delhi, India with a staff of
over 400, which carries out 14 separate functions from email sales to
software development. The Company has a multi brand marketing strategy. Its
brands include ebookers.com, Flightbookers, Travelbag, Travelbag Adventures
Bridge the World, and MrJet. ebookers plc is listed on the London Stock
Exchange and the Nasdaq in the United States of America.
CONTACT: Ebookers Plc
Oliver Strong
Phone: +44 (0) 20 7489 2239
E-mail: oliver.strong@ebookers.com
Phone: +44 (0) 7771 934 153
CUBITT CONSULTING (UK)
Peter Ogden
Phone: +44 (0) 20 7367 5100
E-mail: peter.ogden@cubitt.com
Phone: 07811 124 197
ELDRIDGE POPE: Dumps Merger Bid; Decides to Get Back to Basics
--------------------------------------------------------------
Eldridge Pope recently released its financial results, including an update
of merger discussions previously announced. These discussions, accordingly,
have been terminated, as proposals did not reflect the underlying value of
the Group. The company, will instead, go back to basics, with the new
management team to focus on delivering trading turnaround and enhancing
medium and long-term shareholder value. These are the highlights of the
financial results:
(a) Turnover up 2.7% to GBP34.0 million (2002: GBP33.1 million)
(b) Operating cash flow GBP5.2 million (2002: GBP5.2 million)
(c) EBITDA GBP4.5 million (2002: GBP5.8 million)
(d) PBT GBP0.1 million (2002: GBP1.9 million)
(e) Net debt reduced to GBP44.8million (September 2002: GBP52.6
million)
(f) Net assets per share of GBP2.55 after impairment review
(g) Interim dividend maintained at 2.94p
Christopher Pope, Chairman, said: "On April 14, 2003 we announced that the
Company had received an approach which might or might not have led to an
offer for the Company. The Board explored fully whether it would be in the
best interests of shareholders and the business to be part of a larger
Group. Following discussions with a number of parties the Board has
concluded that the proposals forthcoming significantly undervalued the
business and its pub portfolio.
"These discussions have now been terminated and the Board is confident that
greater medium and long-term value can be achieved for shareholders by
trading the business through the current turnaround phase, and dealing with
the factors which tended to obstruct the exit value.
"By mutual agreement, Michael Johnson has left the Company and Susan
Barratt, currently finance director, has been appointed chief executive
officer. She will be responsible for initiating the 'back to basics'
approach.
"It has been a hard time for all employees, particularly given the level of
press speculation about the Company and I congratulate them on their
steadfastness; I know that they will now put that unhappy period behind
them, and concentrate on their individual part in the recovery which has
already begun."
Susan Barratt, Chief Executive, commented: "It has been a tough six months
and the trading outlook is still unpredictable. However we are confident
that the business will respond to the 'back to basics' approach.
"The trend in sales has improved in the second half, with like-for-like
sales for the 10 weeks to June 14, showing a 5.7% decline. We are focused
on maximizing our financial and operational performance through the busy
summer season still to come."
To See Full Financial Release:
http://bankrupt.com/misc/Eldridge_Pope.htm
CONTACT: ELDRIDGE POPE
Susan Barratt
Phone: 01305 251251
THE COMMUNICATION GROUP PLC
Michael Holmes/Daniel de Belder
Phone: 020 7630 1411
LE MERIDIEN: Progress in Talks Eases Threat of Administration
-------------------------------------------------------------
Talks between the lenders of Le Meridien and Royal Bank of Scotland, over
the hotel chain's GBP20 million- quarterly rental payment that comes due by
the end of the month, are reportedly progressing well.
Failure to pay the rents to Royal Bank of Scotland, which owns 12 of the
group's biggest hotels, including the Grosvenor House and the Waldorf in
London, would trigger a default clause resulting in the hotels group being
put into administration. Sources close to the talks last night said the
latest discussions had been "constructive" and the threat of administration
for Le Meridien had diminished since the start of last week, according to
the Telegraph.
Lehman Brothers, the largest holder of mezzanine debt in Le Meridien, is
reportedly leading in the discussions. It holds more than GBP200 million of
debt. A consortium of banks, led by Merrill Lynch and CIBC World Markets,
holds over GBP700 senior debt.
Yet despite the promising signs the source said: "Lehmans are trying but
they are not there yet. It's looking better but there is some way to go
before we know if they will pull it off."
According to the report, the senior debt holders are haggling over the rent.
They are convincing Royal Bank the current sum is "unrealistic" in the
current business climate.
PPL THERAPEUTICS: Likely to be Broken Up or Sold, Says Report
-------------------------------------------------------------
The future of PPL Therapeutics, the cloning business that produced Dolly, is
slowly being defined by the stake building of hedge fund Metage Capital.
The fund doubled its stake in PPL Therapeutics to 20%, increasing the
possibility that it will be sold or broken up, according to the Telegraph.
Metage Capital did not comment on its move, the report said.
The stake building gathered suspicions because it comes at a time when the
firm's fate is uncertain. PPL's development partner Bayer pulled out its
lead product two weeks ago. The falloff made the firm cling to its last
hope: gaining approval to market its remaining product in development --
Fibrin 1, a surgical glue to stop bleeding after surgery.
The fund's move was also surprising considering that it was previously
critical of the firm's management practices.
"I don't know why they've done this," one source said yesterday. "They've
become the largest shareholder, but not a majority shareholder. It just
doesn't make sense." PPL shares remained constant at 5.12p on Thursday.
The aborted meeting between Geoff Cook, chief executive of PPL, and
shareholders last week was expected to have discussed the possibility of
breaking the business up or selling it. Mr. Cook was forced to cancel his
appointment last week due to illness.
SMF TECHNOLOGIES: Group Turnover Down 9%, Says Chairman
-------------------------------------------------------
SMF Technologies released this statement by Chairman Bill Henebry recently,
along with its annual results:
This is my third Annual Statement as Chairman of SMF Technologies plc having
been appointed as Chairman on 12 January 2001.
Despite the Management Team implementing a more balanced business model,
which has resulted in real progress being achieved, the Company failed to
raise capital either for its technology development program or an
acquisition opportunity identified by Management during 2002/03.
As a result of the proposed acquisition not going ahead, the major
shareholder, who has supported the company since August 2001 through the
provision of a loan note from a company controlled by him, indicated to the
Board that he would not continue to underwrite the Company's operations into
the future. Given the small size of the Company, the fact that the business
of the Company is just break-even and that the returns from the investment
in the new technologies were becoming more and more uncertain, the
Independent Directors authorized the management of the company to consider
making a management buy-out offer.
Contract with Gardon
Gardon is a newly formed company that has not previously traded and is
partially controlled by John McDonnell, Managing Director of the Company for
the last two and a half years. The Company and Gardon have entered into a
purchase and sale agreement pursuant to which the Company has agreed,
subject to shareholder approval, to transfer all the issued share capital of
Suparule Holdings Limited, SupaRule Systems Limited, SupaRules Limited and
SupaRule SA (Pty) Limited to Gardon. Gardon has agreed to have novated to
it the Company's liability of EUR186,000 due to Limerick Tile & Glass
Company Limited, a company controlled by
Martin O'Donoghue and to pay EUR50,000 to the Company in consideration for
the transfer. Mr. McDonnell has also confirmed that he is having
discussions with Enterprise Ireland that should the buyout be approved,
Enterprise Ireland would agree to modifications to the terms of its loan of
EUR190,000.
The agreement contains limited warranties with regard to the Company's
ownership of the shares in the subsidiary companies being sold and the
ability of the company to sell those shares. The maximum liability of the
Company under these warranties is limited to the consideration paid by
Gardon. John McDonnell will be resigning as a Director upon the passing of
the Resolutions although he will continue to assist the Independent
Directors as necessary in any administrative matters concerning the Company.
The view of the Independent Board is that the offer is fair and reasonable
and is being recommended to shareholders for approval at the EGM of July
8th, 2003.
Financial Results & Review of 2002/03 Group Trading Results
For the reasons detailed elsewhere in this statement the directors agreed to
sell the operating subsidiaries to Gardon Limited. In order to recognize
this transaction and on the basis that the financial statements have been
drawn up on the basis that the shareholders will approve the sale an
exceptional provision for impairment losses in group assets of EUR250,000
has been made.
Group turnover was down by 9% for the full year at EUR2,065,794
(2002:EUR2,269,140). The Group loss for the year was EUR260,119 compared
with a loss of EUR273,891 for 2002 a reduction of 5%.
The Group loss for the second half of the year, which includes the
exceptional provision for impairment losses as outlined above, was
EUR291,119 compared with a profit in the first half of EUR31,000 (the
corresponding figures for 2002 was a profit in the second half of EUR4,514
and a loss in the first half of EUR278,405).
The Board continues its policy of charging all Research and Development
costs to the Profit and Loss Account. The Research and Development spend of
EUR212,569 was down on last year's spend of EUR259,577 mainly due to a
reduction in patent renewal costs.
Turnover in South Africa declined from Rand10.9 million to Rand8.9 million,
an 18% decrease in the year. However gross margin increased from 35% to
41%, and overhead expenditure was reduced by 29%. The consolidated figures
of the SA operation were further assisted as the Rand strengthened against
the Euro during 2002/03, which offset the effect of the reduced turnover.
The operation while being profitable requires investment to strengthen its
sales team, improve its marketing, acquire distribution rights for new
product and invest in the research and development work to produce own
manufactured product for sale in South Africa.
Turnover in Ireland grew to EUR1,142,288 from EUR1,016,218 (an increase of
12%). Of the total turnover of EUR1.142million, EUR142,000 (EUR67,000 in
2002) relates to product development license and consultancy income.
However with the current difficult market conditions, income from this
source is not expected to reach this level in the current year.
The Irish trading business continues to be heavily dependent on cable height
meter sales with the balance being made up of Railway Overhead Measurement
ultrasonic product and by third party product sales in Ireland and
over-seas.
The Group's gross profit margin of 50.4% has increased from 43.1% the
previous year. In the current year margins have been improved due to price
increases being applied and a higher level of cable height meter and ROM
sales. However since January
2003 margins are coming under pressure due to greater competition in the
marketplace and the strength of the 'EUR' against the US$.
Net cash outflow from operating activities amounted to EUR26,592, which
compares to a reported loss of EUR253,176. The difference arises primarily
from the exceptional provision for impairment losses of EUR250,000.
Technology Development
SMF's power electronics technology (SMFTM Technology) measures electrical
current in high and low voltage environments. The technology has
applications, both on the micro level, in mass-produced current measuring
devices and on the macro level to electrical utilities. The technologies can
be sub-divided into two distinct categories namely:
(a) A non-invasive planar magnetic coil sensor for measuring current in a
single or multi-core cable, and
(b) A non-invasive measurement system for overhead current in medium and
high-voltage environments - (Remote Line Monitor - technology)
Current Trading and Outlook
In difficult trading conditions globally, the operational performance of the
Group over the last twelve months has been satisfactory. While turnover has
decreased, margins have improved and costs have decreased. However the
costs of remaining quoted and the inability to see returns from the
investment in research and development led the Board to make the difficult
decision that the company had no future as a quoted company. This was
reinforced with the withdrawing of the loan note facility from the major
shareholder (a facility of EUR640,000 existed of which the company has
utilized EUR172,000 to date) and the lack of ability to raise much needed
investment finance. The Board is recommending a management buy-out.
Extraordinary General Meeting
I would draw your attention to the holding of an extraordinary general
meeting on July 8th, 2003 for the purposes of facilitating the sale of the
trading subsidiaries as outlined in the circular to shareholders of June
9th, 2003.
Conclusion
During the last twelve months, the Board and Management were focused on the
parallel processes of commercializing the SMFTM technology, of growing sales
from the current product range and on identifying a suitable acquisition to
exponentially grow the Group and achieve profitability. These strategies
required investment and unfortunately the level of investment required was
not forthcoming from the investment community. This compounded by the
withdrawal of support from the company's major shareholder, led the Board to
conclude that continuing to trade as a quoted company was not a feasible
option. Under these circumstances, the Board believes that it is in the
best interest of shareholders to dispose of the trading divisions of the
Company and put the Company on the market as a shell. The EGM on July 8th,
will decide this matter.
I would like to thank our shareholders and staff for their continued support
over the past year.
To See Financial Statements:
http://bankrupt.com/misc/SMF_Technologies.htm
SMG PLC: Successfully Defends Suit Brought by Chris Evans
---------------------------------------------------------
The Court ruled on Thursday that Chris Evans had repeatedly broken the terms
of his contract and that Virgin Radio acted properly in terminating his
contract. Mr. Justice Lightman has decided that he is not entitled to any
of the shares he was claiming and dismissed his claim for damages. The
judge has also made it clear that Virgin Radio is entitled to seek damages
from Chris Evans and these, along with costs, will be determined at a later
hearing.
Commenting after the judgment was announced, Andrew Flanagan, Chief
Executive of SMG, said: "We had a duty and a responsibility to vigorously
defend our actions and this case on behalf of our shareholders. All our
actions have been totally vindicated with Thursday's judgment."
CONTACT: SMG PLC
Callum Spreng, Corporate Affairs Director
Phone: 0141 300 3300
SOPHEON PLC: Discloses Sale Agreement Involving U.S. Business
-------------------------------------------------------------
Sopheon plc the international provider of software and services that improve
the financial return from innovation and product development investments,
announces that it has signed a definitive asset purchase agreement to divest
its U.S.-based Information Management division, to FIND/SVP Inc of New York,
USA.
The gross value of the transaction amounts to just over US$5 million,
including US$3 million in immediate cash consideration and a further US$0.4
million in potential earn-outs. FIND will also assume approximately US$2.1
million of net current liabilities and approximately US$0.45 million of
tangible fixed assets. As part of the structure of the transaction, FIND
will issue US$50,000 of its stock to Sopheon on completion, and shortly
thereafter Sopheon will issue US$100,000 of Sopheon ordinary shares to FIND.
Completion of the transaction is contingent upon the receipt of certain
routine consents and the delivery of certain ancillary agreements and
formalities, and is expected to take place prior to 15 July 2003.
To maintain the differentiation that embedded information management support
brings to its Accolade product development system, Sopheon will continue to
provide and market the divested services through an exclusive outsourcing
arrangement with FIND.
Sopheon's Chairman, Barry Mence said: "We believe that this transaction will
provide significant value to our company and our shareholders, not only by
realizing additional finance for the implementation of our strategies, but
also by enabling us to focus better on the exceptional opportunity
represented by Accolade, Sopheon's flagship software solution for product
development. In parallel, we continue to make good progress on the
remaining steps of our previously announced plan -- the review of our German
operations, the extension of convertible loan notes, and driving further
growth into our software business. We will update our shareholders on
theses initiatives as developments unfold."
Sopheon (LSE:SPE) is an international provider of software tools, experts
and content that help organizations improve the business impact of product
development. Sopheon enables clients to achieve higher, faster return on
innovation and product development investments through technology and
human-based decision support. The company's products and services include
its flagship Accolade(R) product development system and Knowledge Network
(formerly Organik(R)) expertise-sharing software. Sopheon is listed on the
AIM market of the London Stock Exchange and on the Euronext in the
Netherlands. For more
information, please visit http://www.sopheon.com
FIND/SVP, Inc. is a knowledge services company that offers a full suite of
custom business intelligence, advisory, and consulting solutions to address
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CONTACT: SOPHEON PLC
Barry Mence, Chairman
Phone: + 44 (0) 1483 883 000
Arif Karimjee, Chief Financial Officer
Adam Reynolds, Hansard Communications
Phone: + 44 (0) 207 245 1100
Phone: + 44 (0) 7957 203 685
Andrew Tan
CITIGATE FIRST FINANCIAL
Barbara Jansen
Phone: + 31 (0) 205 754 010
SYNGINCE PLC: Shares Suspended Pending Possible Refinancing
-----------------------------------------------------------
Further to the announcement by Synigence plc that its shares have been
suspended, the Company announces that it is in discussions with the holder
of GBP1.5 million of 2% Unsecured Convertible Loan Stock issued by the
Company with regard to a possible refinancing, including a potential share
subscription.
TADPOLE TECHNOLOGY: Accepts Former Affiliate's Cash Settlement
--------------------------------------------------------------
Tadpole announces that it has agreed to accept US$2 million in cash in
settlement of the outstanding promissory notes due from Tadpole Computer,
Inc. These are split as to a US$6.0 million note at 5% with an option to
convert into 19.5% of the equity of Tadpole Computer Inc. and a US$2.5
million note at 7.5 %, both notes are repayable at the end of 2007.
In December 2002, Tadpole completed the sale of its hardware business to a
consortium of investors who then formed Tadpole Computer, Inc.; the Notes
formed part of the consideration.
Under the terms of the settlement agreement, the Company has on Thursday
received US$2.0 million in cash in part settlement of the Notes. In
addition, the agreement allows for a further US$0.75 million to be paid to
Tadpole in three equal installments in June 2005, 2006 and 2007, subject to
Tadpole Computer, Inc. achieving a defined level of profitability at these
milestone dates. The Company will also receive the deferred amounts of the
initial cash consideration as and when they are due.
In view of the current stage of Tadpole's development and the potential
returns from continued investment in this critical stage of Endeavors'
growth, the Board concluded that it would be in shareholders interests as a
whole to receive value for the Notes rather than when they become due in
four and a half years' time. In coming to this decision, the Board took
into account the current state of the market in UNIX products worldwide
which is facing increasing competition, and the fact that an immediate
receipt of US$2.0 million cash would substantially reduce the need for
Tadpole to make further draw downs against the GEM equity credit line,
although further use of this facility is not ruled out. To date, the
company has drawn down GBP4.9 million against the GEM GBP10 million equity
line of credit, which expires in January 2004.
This agreement results in the need to make a provision of GBP4.1 million
against a book value of US$8.5 million for the Notes. The company is taking
no recognition of future earn outs.
TRINITY MIRROR: Posts Trading Update for July Interim Results
-------------------------------------------------------------
Trinity Mirror plc on Thursday issued a trading update ahead of the
company's interim results announcement on July 31.
Advertising revenues
Advertising conditions have remained volatile during the last six months.
Group advertising revenues for the 26-week period are expected to be flat
year on year, with a 0.6% increase in the first quarter offset by a 0.4%
decline in the second quarter. The weaker performance in the second quarter
reflects the impact of the war in Iraq and incremental World Cup revenues in
June 2002.
The Regionals division (incorporating Digital Media and Metros) is expected
to achieve advertising revenue growth of 0.6% year on year for the 26-week
period. Excluding Digital Media and Metros, advertising revenues for the
Regional newspaper titles are expected to fall by 0.3%. This reflects a
0.8% decline in the first quarter partially offset by an expected 0.3%
increase in the second quarter.
The Regional newspaper titles (excluding Metros and our titles in London and
the South East) are expected to achieve advertising revenue growth of 1.2%
year on year. London and the South East advertising revenues are expected
to fall by 4.4% year on year. Recruitment revenues in the Regional
newspaper titles are expected to fall by 1.0% year on year, a 12.9% fall in
London and the South East substantially offset by an increase of 3.0% in the
rest of the Regional newspaper titles.
Advertising revenues for the 26-week period for the Nationals division are
expected to fall by 0.8% year on year, with an expected 0.1% increase in the
U.K. National titles offset by an expected 3.4% decline for the Scottish
National titles. A strong first quarter saw advertising revenue grow by
1.4%. The second quarter was weaker with advertising revenue expected to
fall by 3.1%.
Circulation
Group circulation revenues for the 26-week period are expected to fall by
2.8% year on year with a 7.5% decline in Q1 offset by an expected 2.1%
increase in Q2.
Circulation revenues for the Regional newspaper titles are expected to fall
by 1.0% for the period, with cover price increases partially offsetting
revenue declines from volume decreases.
Circulation revenues for the Nationals division are expected to fall by
4.4%, representing falls of 5.0% and 2.1% for the UK and Scottish National
titles respectively. Restoring the normal cover price of the Daily Mirror
has impacted circulation, which fell year on year by 5.2% (excluding
sampling) for the first
5 months. However, circulation of the Daily Mirror rose 1.9% month on month
in May following a 3.4% month on month fall in April.
Outlook
As noted at the AGM the directors believe the uncertain external trading
environment will continue for the remainder of the year. Nevertheless,
subject to there being no further adverse changes to the trading environment
the Board anticipates a satisfactory outcome for the year.
(a) all results are shown on a like for like basis, excluding the results of
Post Publications Limited and Ethnic Media Group Limited which were disposed
of in June 2002, Channel One which ceased trading in November 2002 and
Wheatley Dyson & Son Limited which was disposed of in February 2003.
CONTACT: TRINITY MIRROR PLC
Phone: 020 7293 3000
Sly Bailey, Chief Executive
Vijay Vaghela, Group Finance Director
Nick Fullagar, Director of Corporate Communications
FINSBURY
Phone: 020 7251 3801
Rupert Younger
Don Hunter
VIRTUE BROADCASTING: Sells U.K. Media Services Division
-------------------------------------------------------
Virtue Broadcasting Plc announces that it has divested its U.K. Media
Services division, one of its subsidiary companies, Virtue Media Services
Limited, to Interoute Communications Limited for an aggregate consideration
of approximately GBP800,000, in order to focus on the Corporate
Communication market segment and capitalize on its current market position.
ICL has been treated as a related party for the purposes of the rules of the
Alternative Investment Market as it is believed that Interoute
Finance Plc, which owns 13.4% of Virtue, is related to Interoute
Communications Limited.
VMS contributed a pre-tax loss before exceptional items from continuing
operations of GBP1,345,000 on turnover of GBP1,711,000 to the Group's result
in the financial year ended 31 December 2002. At 31 December 2002 VMS had
net assets of
GBP569,000.
The consideration is comprised of cash payable on completion of GBP600,000
and adjusted net working capital as at 30 June, which the Board estimates to
be GBP200,000, payable over a period of six months from completion.
Additionally, Interoute will provide a range of services to Virtue to the
value of EUR168,000 and has contracted to purchase GBP77,000 of services
from Virtue.
Mr. Nicholas English and Mr. Giles English, who will each remain with VMS as
employees and directors until the closure of the transaction, are deemed not
to be independent directors of Virtue in relation to the disposal and as
such have not participated in the Board's consideration of the disposal.
The board of Virtue, other than Mr. Nicholas English and Mr. Giles English,
having consulted Brewin Dolphin Securities, the Company's nominated adviser,
believe the terms of the transaction are fair and reasonable insofar as
shareholders are concerned.
Following the disposal, Virtue will be solely focused on the Corporate
Communication market segment, where it has a strong market position.
Further information on the refocus will be included in the Group's
preliminary announcement. The Group's Corporate Services division will
consist of two subsidiaries: Virtue Corporate Services Limited and Virtue
Broadcasting Pty Ltd, operating in the UK and Australia respectively.
The proceeds of the divestment will be used to fund the Group's working
capital requirements over the coming year.
CONTACT: VIRTUAL BROADCASTING
Phone: 0207 785 6000
Neil Ferris, Chairman
James Ormondroyd, Finance Director
MANTRA PR LTD.
Phone: 0207 072 2319/07831 655 630
John Barrington-Carver
WS ATKINS: Net Debt Widens by GBP14.7 Million
---------------------------------------------
Consultancy and support services group WS Atkins plc announced preliminary
unaudited results for the year ended 31 March 2003.
Financial Summary
Year to 31 Year to 31
March 2003 March 2002
GBP million GBP million
Turnover excluding share of joint ventures 935.3 806.3
Adjusted profit before tax (1) 18.7 38.1
Exceptional items before tax (64.5) (6.1)
(Loss)/profit on ordinary activities before tax
(61.6) 20.9
Basic EPS
(58.7)p 13.1p
Adjusted EPS (1) 16.5p 31.4p
Dividend per share 3.0p 11.3p
Net debt (2) (71.9) (57.2)
(1) Adjusted profit is before Metronet bid costs, pension credit, goodwill
amortization, exceptional items and Employee Benefit Trusts. 2002 figures
have been adjusted to be comparable.
(2) Net debt excludes cash held by the Employee Benefit Trusts and cash held
on behalf of sub-contractors.
Highlights:
(a) Adjusted profit before tax of GBP18.7 million (vs. GBP15 million
forecast in trading statement).
(b) Cost reduction exercise delivering benefits.
(c) Billing and credit control processes strengthened.
(d) Medium-term financing in place.
(e) Core operational businesses sound with strong order book.
(f) Metronet financial close achieved April 2003 providing significant new
work stream.
(g) New Chief Executive appointed.
Michael Jeffries, Chairman of Atkins said: "I am pleased with the
considerable progress we have made in the second half of the year, although
the past year has been a difficult one for Atkins. Our core operational
businesses are sound and we are focused on cost reduction, improving margins
and cash collection.
"Results in the early part of the new financial year have been in line with
our expectations. The Board is confident that the benefits from the Group's
cost reduction program and stronger focus on operations will lead to a
significant recovery in performance.
"I am also pleased to announce the appointment of Keith Clarke as Chief
Executive. He will join the Board in October from Skanska AB where he is
currently Executive Vice President."
Financial summary
(a) The results show an adjusted profit of GBP18.7m (2002: GBP38.1m) for the
year to 31 March 2003. This is an improvement on the forecast in our
trading statement of 4 April 2003.
(b) The underlying trading performance of the Group's core Rail, Highways &
Transportation and Design businesses was in line with expectations during
the second half of the year. Workload was strong and performance at both
turnover and contribution level was good. The Group continued to win and
retain contracts with key customers throughout the period and our forward
order book is healthy.
(c) Market conditions remained challenging in the Group's North American
business where ongoing deferral of capital investment meant fewer
opportunities and intense competition to win work. However Hanscomb
(acquired June 2002) performed well.
(d) As outlined in our trading statement of 1 October 2002, the Group's
results for the year were significantly impacted by last year's
implementation of our new back office systems and associated running and
remediation costs.
The Group announced a cost reduction program in October 2002 and at the
year-end this exercise had achieved savings in excess of GBP15m on an
annualized basis. Although external cost pressures will continue to provide
a challenge, we are constantly working to manage our cost base.
(e) The Group made substantial progress on improving its debt management in
the second half of the year and at 31 March 2003, net debt (2) had been
reduced to GBP71.9 million from GBP105.4 million at 30 September 2002. On
27 February 2003, the Group announced that it had signed new medium-term
banking facilities. It is the Group's intention to reduce net debt levels
further.
(f) Loss before tax of GBP61.6 million is after exceptional costs of GBP64.5
million, of which:
(1) GBP14.8 million related to the cost reduction program
and other reorganisation and financial restructuring
charges;
(2) GBP33.3 million related to impairment of assets,
primarily in the North American business; and
(3) GBP16.4m was written off the carrying value of own
shares held in Employee Benefit Trusts (EBT) in the
first half of the year.
The cash impact of the above exceptional costs was GBP11.7 million in the
year. The asset impairments and EBT write-downs were non-cash items.
(g) The Group has a 20% stake in the Metronet consortium, which, on 4 April
2003, reached financial close on the 30-year Public Private Partnership to
modernize and manage the major proportion of the infrastructure of the
London Underground. During the year, bid costs of GBP8.4 million were
incurred in respect of this project and were written off to the profit and
loss account in accordance with UITF 34. Cumulative bid costs and
development fees of GBP20 million were reimbursed on 4 April 2003 and will
be amortized over the life of the Metronet concessions in accordance with
the Group's accounting policies.
Additional bid costs of GBP4.7 million were expensed during the year on
other PFI/PPP projects, including Colchester Garrison.
(h) The Board is confident that prospects for the Group's improved
performance are good and accordingly is recommending a final dividend of
3.0p per share (2002 Total for year: 11.3p).
Notes Year to 31 Year to 31
Reconciliation of statutory and adjusted results
March 2003 March 2002
GBP million GBP million
Turnover 935.3 806.3
Contribution from operating divisions (1)
123.8 116.7
Overheads (105.0) (80.3)
2 18.8 36.4
Joint ventures operating profit 14.2 14.5
Net interest payable (incl JV's, excl EBTs)
(9.6) (7.7)
Bid costs (excl. Metronet)
(4.7) (5.1)
Adjusted profit before tax
18.7 38.1
Metronet bid costs (8.4) (3.8)
Pension credit 3.7 3.4
Amortisation of goodwill (11.1) (9.4)
Employee Benefit Trusts - (1.3)
Profit on ordinary activities before tax and exceptional
items
2.9 27.0
Exceptional items (64.5) (6.1)
(Loss)/ profit on ordinary activities before tax
(61.6) 20.9
(1) Contribution from operating divisions is operating profit before
allocation of overhead costs amortisation of pension surplus and goodwill,
bid costs, EBTs, Joint Ventures and exceptional items.
(2) See note 2 to the Summary Financial Statements.
To See Financial Statements:
http://bankrupt.com/misc/Ws_Atkins.htm
CONTACT: WS ATKINS
Michael Jeffries, Chairman
Phone: + 44 (0) 1372 726140
Stephen Billingham, Group Finance Director
Phone: + 44 (0) 1372 726140
Richard Scrase, Head of Communications
Phone: + 44 (0) 1372 726140
BRUNSWICK
Rebecca Blackwood or Craig Breheny
Phone: + 44 (0) 20 7404 5959
WS ATKINS: Names Keith Clarke New Chief Executive
-------------------------------------------------
The Board of consultancy and support services group WS Atkins PLC announces
the appointment of Mr. Keith Clarke as its new Chief Executive. Mr. Clarke
will join Atkins from construction services group Skanska on 1 October 2003.
Keith Clarke, 51, an architect, is currently Executive Vice President of
Skanska AB. He is responsible for the Group's activities in the U.K.,
Poland and the Czech Republic. Previously, Mr. Clarke worked for Olympia
and York, Trafalgar House and Kvaerner.
Chairman Michael Jeffries will continue in the role of interim CEO until
October.
Keith Clarke said: "I am very excited at the prospect of joining Atkins.
The company has strong core operating businesses. The skills and experience
of the staff are the Group's prime asset and I am looking forward to working
with Michael Jeffries, Stephen Billingham and the rest of the management
team."
Michael Jeffries, Chairman, said: "I am delighted that Keith has agreed to
join Atkins. He is a well-known, successful senior executive in our
industry, with a great track record and excellent leadership qualities.
With his experience of businesses based on major projects, I believe that he
has the capabilities to lead Atkins through its next phase of development
and build on the improving performance reported in this morning's results
announcement."
Atkins is one of the world's leading providers of professional,
technologically based consultancy and support services. Atkins operates
around the world and employs 15,000 permanent staff. This morning the Group
separately reported its financial results for the year to 31 March 2003.
CONTACT: WS ATKINS
Richard Scrase, Head of Communications
Phone: 01372 752897
E-mail: richard.scrase@atkinsglobal.com
Rebecca Blackwood or Craig Breheny
Phone: 020 7404 5959
Brunswick
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S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2003. All rights reserved. ISSN 1529-2754.
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