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/raid1/www/Hosts/bankrupt/TCREUR_Public/030828.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, August 28, 2003, Vol. 4, No. 170 Headlines F R A N C E AIR FRANCE: SARS, Iraq War, Strike Hit First Half Results ALSTOM SA: V-Chairman Purves Resigns; James Leng to Join Board PROVIMI SA: Moody's Withdraws Low-B Senior Ratings VIVENDI UNIVERSAL: Liberty Media Withdraws from Bidding Process VIVENDI UNIVERSAL: Pursuing Sale Negotiations with NBC, Bronfman G E R M A N Y BABCOCK BORSIG: Maessa May Take Over Spanish Subsidiaries BERTELSMANN AG: BertelsmannSpringer Sale Cleared; Merger Okayed DEUTSCHE TELEKOM: Ratings Unaffected by EUR1 BB Offer for PTC MANNHEIMER AG: Reports Net Loss Due to EUR147.5MM Writedowns MG TECHNOLOGIES: To Buy Back Up to 10% of Shares RHEINMETALL GMBH: Sells Jagenberg Subsidiary to Kleinewefers H U N G A R Y MALEV HUNGARIAN: Strategy Could Include Selling Two Planes I R E L A N D ELAN CORPORATION: Spectral Fulfills Termination Agreement KBC ASSET: Announces Job Cuts, Departure of Chief Executive N E T H E R L A N D S HAGEMEYER: Long-term Viability Continues to Hang in Balance ROYAL PHILIPS: Restructuring Will Not Affect Barcelona Plants UNITED PAN-EUROPE: Supreme Court Dismisses Dutch Akkoord Appeal P O L A N D BANK PEKAO: Fitch Raises Individual Rating to C from C/D LOT AIRLINES: Cancels Flights to Basra Due to Security Concerns S W E D E N BEVE ELECTRONICS: Mitec Telecom Sells Troubled Electronics Unit LM ERICSSON: Still Cautious Regarding Market Outlook U N I T E D K I N G D O M CANARY WHARF: Chairman Signals Interest in Submitting Bid EASYJET: Founder Divests More Stake to Fund New Businesses ELDRIDGE: CI Traders Confirms Bid Talk But Won't Promise Deal EXETER INVESTMENT: Board Approves Proposed Sale of Contract F.C.P. LIMITED: Reports Administrative Receivers' Appointment FINSBURY LIFE: Petitions to Cancel Shares Premium Account POWERHOUSE: Receivers Working Out Possible Bids for Retailer RESOURCE TO INDUSTRY: Administrators Sell Business And Assets ROYAL MAIL: Loosens Pay Stance over Threat of Industrial Action ROYAL & SUNALLIANCE: Codan Considers Selling Life, Pension Biz SANDERSON & SONS: Joint Receivers Offer Business for Sale * Dewey Ballantine Hires Leading German Finance Partner ********* =========== F R A N C E =========== AIR FRANCE: SARS, Iraq War, Strike Hit First Half Results --------------------------------------------------------- Net profits of Air France, Europe's second-largest airline, declined 97% in the three months to the end of June due to domestic strikes, the outbreak of SARS, and the conflict in Iraq. The airline posted net profit of EUR4 million (GBP2.7 million), down from EUR146 million in the same period last year, as SARS took about EUR100 million from revenue, and the strike action drained itself of some EUR67 million. "The business climate further deteriorated during the quarter," the airline said. It recorded passenger traffic down by 5.7% the three-month period as capacity was reduced by 3%. But the airline reassured that it will post a small operating profit for its 2003/2004 fiscal year. ALSTOM SA: V-Chairman Purves Resigns; James Leng to Join Board -------------------------------------------------------------- ALSTOM announced Tuesday that Sir William Purves, Vice Chairman of ALSTOM's Board of Directors since 1998, has informed the Board of his decision to retire and has resigned. The Board has approved the proposed appointment of Mr. James Leng as a Director of ALSTOM and a resolution appointing Mr. James Leng as a Director will be submitted for Shareholder approval at the Shareholders' Meeting to be held on second call on September 24, 2003. Once appointed, Mr. Leng will qualify as an independent Director on ALSTOM's Board of Directors. Mr. Leng is currently Chairman of Corus Group plc, the British and Dutch steel company, and non-executive director of Pilkington plc, IMI plc, and JP Morgan Fleming Mid Cap Investment Trust plc. He is also a Governor of the National Institute of Economic and Social Research and a Fellow of the Institute of Marketing (U.K.). From 1995 until June 2001, Mr. Leng was Chief Executive Officer of Laporte plc, one of the world's speciality chemical companies, where he led the successful restructuring of the company, its management structure and business portfolio. Prior to his position at Laporte plc, Mr. Leng was Chief Executive Officer of Low & Bonar plc, the international packaging and materials group which he joined in 1984. PROVIMI SA: Moody's Withdraws Low-B Senior Ratings -------------------------------------------------- Moody's Investors Service withdrew the senior implied rating and senior unsecured issuer rating of animal feed producer Provimi S.A. at the company's request. The instruments were rated Ba1 and Ba3, respectively. The action follows Standard & Poor's withdrawal of the France- based company's 'BB+' long-term corporate credit rating early this month. The company with management headquarters in Rotterdam, The Netherlands, had sales of EUR1.5 billion in 2002. At Dec. 31, 2002, Provimi had total debt of EUR593 million, which was primarily drawn under its EUR580 million syndicated senior secured credit facilities, and coverage of net debt by funds from operations of 17%, up from 15% a year before. The group has no rated bond issues or rated bank loans. VIVENDI UNIVERSAL: Liberty Media Withdraws from Bidding Process --------------------------------------------------------------- Liberty Media Corporation announced Monday that it has notified Vivendi Universal SA of its decision to withdraw from the bidding process for the assets of Vivendi Universal Entertainment. Liberty Media had previously expressed interest in the Vivendi Universal Entertainment assets and had been conducting its own analysis of the assets. Robert Bennett, President and CEO of Liberty Media stated, "The Vivendi Universal Entertainment assets represent a unique collection of high quality media assets. However, the synergy opportunities with our other businesses are not sufficient to support the expected transaction value. We maintain a significant investment in Vivendi and we wish the Vivendi management team much success as they evaluate alternatives for the Vivendi Universal Entertainment assets." Liberty Media Corporation owns interests in a broad range of video programming, broadband distribution, interactive technology services and communications businesses. Liberty Media and its affiliated companies operate in the United States, Europe, South America and Asia with some of the world's most recognized and respected brands, including Encore, STARZ!, Discovery, IAC/InterActiveCorp, QVC, Court TV and Sprint PCS. * * * * * Liberty Media was the leading contender among the few groups vying for Vivendi Universal's U.S. entertainment assets. Vivendi has sold only EUR2.9 billion in assets of the EUR7 billion it had targeted for disposal this year as part of debt- reduction plans. Group debt stood at EUR13.5 billion at the end of June, down from EUR35 billion six months earlier. The company hopes to spin VUE off by the end of September in what could be one of the highest-profile financial and strategic transactions of the year, due to its potential for reshaping the global media landscape. VUE's future owner is expected to gain a serious advantage in the huge, but consolidating, U.S. cable television sector. The subsidiary includes Universal Studios, the USA Networks cable television operations and theme parks. VIVENDI UNIVERSAL: Pursuing Sale Negotiations with NBC, Bronfman ---------------------------------------------------------------- The Board of Directors of Vivendi Universal (Paris Bourse: EX FP; NYSE: V) met Tuesday to examine the bids received for VUE and expressed its satisfaction with the high level of interest shown in these assets. Vivendi Universal has decided to enter into further negotiations with the two strongest bidders. Both bids include industrial and financial aspects (debt deconsolidation and cash or cash equivalents). In both cases, Vivendi Universal would maintain a substantial minority interest in a U.S. media corporation with excellent growth potential. The two bids were received from: (a) NBC, a leader in U.S. television and a subsidiary of General Electric. An association between NBC and VUE would form one of the world's largest media companies; (b) a group of industrial and financial investors headed by Cablevision, the New York region's main cable TV operator, and by Thomas H. Lee Partners, one of the world's biggest private equity funds, and led by Mr. Edgar Bronfman, Jr. At the same time, Vivendi Universal is continuing to investigate an IPO for VUE, which would take place after the implementation of strategic alliances aimed at strengthening its television activities. ONTACT: VIVENDI UNIVERSAL Investor Relations New York Eileen McLaughlin Phone: +(1) 212.572.8961 ============= G E R M A N Y ============= BABCOCK BORSIG: Maessa May Take Over Spanish Subsidiaries --------------------------------------------------------- Subsidiaries of the Babcock Borsig Espana, the Spanish branch of insolvent German engineering group Babcock Borsig, might be sold off to Maessa. Online news agency Kiplinger.com said Maessa, which is a subsidiary of Spanish construction group ACS, is the favorite bidder for Babcock Espana's affiliates. Union sources say the German group wants to sell the subsidiary in two phases, Babcock Montajes and sotron first and then the parent company. Babcock Borsig Espana could go to Enviroarc of Norway or Ultramar of Mexico. Ultramar and Enviroarc offered long-term plans for the business, taking into account industrial, employment and technological factors, and contract transfer guarantees. Babcock Borsig acquired the Spanish engineering company from SEPI in 2001, agreeing to a business plan, which included investments of EUR135 million over four years, and maintaining a workforce of 650 for five years. Following the German group's filing for insolvency in July 2002, a Spanish metal union based in the autonomous region of the Basque Country had asked Sociedad Estatal de Participaciones Estatales to find a solvent and credible buyer for the company. The union is believed to be seeking for an industrial plan that could guarantee investments in technology and employment. CONTACT: BABCOCK'S TRUSTEE Dr. Helmut Schmitz & Thomas Schmitz - Lawyers Am Flohbusch 1 47802 Krefeld Phone: 02151 / 965350 Fax: 02151 / 965360 E-Mail: radr.Schmitz@t-online.de BERTELSMANN AG: BertelsmannSpringer Sale Cleared; Merger Okayed --------------------------------------------------------------- Cinven and Candover*, leading European buyout specialists, announce that the U.S. Department of Justice has cleared the EUR1.05 billion acquisition of BertelsmannSpringer, one of the world's leading academic publishers, and its proposed merger with Kluwer Academic Publishers, another leading international publisher. The acquisition and merger, initially announced on May 13, 2003, will create a global leader in STM publishing with total combined revenues of about EUR880 million. The newly merged entity of Kluwer Academic Publishers and BertelsmannSpringer will be re- named Springer. The acquisition of BertelsmannSpringer is expected to complete on September 15, 2003. In a joint statement, Simon Leefe, Director of Candover, and Peter Gangsted, Managing Director of Cinven Germany, said: "Today's approval from the U.S. Department of Justice paves the way for the creation of Springer as a global leader in STM publishing. Springer will have the financial backing and commitment to drive its business forward, providing better information and services to its customers and improving the quality of data for researchers. "Both Candover and Cinven have proven track records of investing in the media sector and this acquisition is in line with our focus on backing leading European businesses with exciting growth prospects." Additional information on the creation of Springer Cinven and Candover received regulatory clearance from the European Commission for the acquisition and merger on July 29, 2003 having removed competition concerns arising in France by offering to divest BertelsmannSpringer's French professional medical publishing business, known under the name Groupe Impact Medecin. On June 18, 2003 Candover and Cinven appointed Derk Haank as Chief Executive of Springer. Mr Haank has an outstanding track record in the European publishing industry, focusing specifically on scientific and B2B publishing. Most recently, he was Chief Executive of Elsevier, an Executive Board Member of Reed Elsevier NV, as well as a Director of Reed Elsevier PLC and Reed Elsevier Group plc. Cinven and Candover will invest from the EUR4.4 billion third Cinven fund and the EUR2.7 billion Candover 2001 Fund respectively, for equal equity stakes in BertelsmannSpringer. Senior, mezzanine and working capital facilities to support the transaction, have been arranged and underwritten by Barclays Capital. BertelsmannSpringer is a world-leading academic and professional publisher headquartered in Berlin and Heidelberg with sales in 2002 of EUR731 million. With 70 publishing houses, it specializes in trade and science literature and publishes more than 700 journals and trade magazines and over 4,000 new book titles each year. It employs over 5,000 people in 16 countries. BertelsmannSpringer's end users are academic and corporate researchers, who act both as providers of manuscripts and readers of journals and books. In professional publishing, BertelsmannSpringer is a leading German business-to-business publisher, in areas ranging from construction to transport. Kluwer Academic Publishers was acquired by Candover and Cinven in January 2003 in a transaction worth EUR600 million. Kluwer Academic Publishers, like BertelsmannSpringer, is a global publisher of scientific and academic information and is headquartered in Dordrecht in the Netherlands. The company publishes 700 scientific and technical journal titles and approximately 1,200 new book titles a year as well as managing an active backlist of about 13,000 books. Turnover for the year to 31 December 2002 was EUR151.0 million. Both businesses complement each other well and have strong reputations in an industry with good growth potential. *Candover means Candover Investments plc and/or Candover Partners Limited as General Partner of the Candover 2001 Fund. CONTACT: CANDOVER CINVEN Simon Leefe, Director Peter Gangsted, Managing Director Phone: +44 (0)20 7489 9848 Phone: +44 (0)20 7831 3113 DEUTSCHE TELEKOM: Ratings Unaffected by EUR1 BB Offer for PTC ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and outlook on Germany-based telecommunications operator Deutsche Telekom A.G. (BBB+/Stable/A-2), were not affected by the group's offer of EUR1 billion ($1.1 billion) in cash for the remaining 51% interest in Polska Telefonia Cyfrowa Sp. Z o.o. (PTC; BB+/Stable/--) that it does not currently own. "Standard & Poor's does not see the offer as inconsistent with Deutsche Telekom's debt reduction strategy and the group's commitment to this financial policy has been reaffirmed," said Standard & Poor's credit analyst Simon Redmond. "Although Deutsche Telekom remains over-leveraged for the ratings, we continue to expect the group's ratio of adjusted net debt to EBITDA to improve to a level that will not materially exceed 3x, including pension liabilities." This expectation is based on Deutsche Telekom's strong operational performance and cash generation, which continued in the second quarter of 2003, in addition to asset sales and capital expenditure cuts. The offer -- to Polska Telefonia's other owners, Elektrim SA and Vivendi Universal SA (BB/Stable/B) -- stands until Sept. 5, 2003. If agreed, completion and payment would occur in 2004. MANNHEIMER AG: Reports Net Loss Due to EUR147.5MM Writedowns ------------------------------------------------------------ In the interim report as of June 30, 2003 published Tuesday, The Mannheimer insurance group reports -- after a net loss in the first quarter of EUR63.6 million -- a net loss of the year of EUR103.6 million. This result is due mainly to write-downs on investments of EUR147.5 million, which in consideration of the agreement with Protektor resulted in a negative investment result of EUR44.3 million in the first half year 2003; this includes write-downs of Mannheimer Lebensversicherung AG investments of EUR79.5 million. Year-on-year, group premium income increased by 4.0% to EUR437.1 million, with costs in the same period increasing by 0.5%. The Group posted an underwriting loss of EUR79.5 million. The quarterly closing includes the balance sheet charges resulting from the transfer of the Mannheimer Lebensversicherung AG portfolio to Protektor Lebensversicherungs-AG. This does not relate to the loan of between EUR210 million and EUR230 million which is to be paid back to Protektor over time. To the year-end, suitable measures for the necessary improvement of the capital basis are targeted. MG TECHNOLOGIES: To Buy Back Up to 10% of Shares ------------------------------------------------ Mg technologies Ag has decided to implement the resolution adopted at its most recent Annual Shareholders' Meeting on June 3, 2003, which authorized the company to repurchase its own shares. Mg's Executive Board decided to repurchase up to 10% of the company's capital stock in issue at the time the resolution was adopted by the Annual Shareholders' Meeting. The shares will be repurchased on or before November 30, 2004, when the above authorization expires. ***** Moody's Investors Service recently placed MG Technologies' long- term debt ratings on review for possible downgrade because of the deterioration of its operating performance and weak cash flow generation over the past quarters. The group reported a pre-tax loss of EUR21 million (US$23 million) for the second quarter of 2003. It does not expect improvements in its performance in the second half. RHEINMETALL GMBH: Sells Jagenberg Subsidiary to Kleinewefers ------------------------------------------------------------ Dusseldorf-based Rheinmetall Maschinenbau GmbH, a wholly owned subsidiary of Rheinmetall AG, has as of July 31, 2003, sold all of its 93.7% stake in Jagenberg AG, Neuss, to Kleinewefers Verwaltungs-GmbH, Krefeld. The parties have agreed not to disclose details about the deal. Following the recent sale of Lemo Maschinenbau GmbH, Niederkassel-Mondorf, and now the transfer of the Jagenberg stake, Rheinmetall has, as announced, completed in 2003 the divestment of this financial investee. Most recently, Jagenberg AG's business has focused on its subsidiary Kampf GmbH & Co. Maschinenfabrik, Wiehl-Muhlen. In the market for film/foil technology, Kampf is a foremost specialist in slitting/rewinding machines. In 2002, its workforce totaled 395, its sales around EUR85 million. KKA Kleinewefers Anlagen GmbH, Munich, another mechanical engineering subsidiary of Kleinewefers', is a leading supplier of machinery and plant used in the production and conversion of plastic film and laminates. Through this indirect takeover of Kampf, Kleinewefers is adding to its product range in this market. Klaus Eberhardt, CEO of Rheinmetall AG: "As planned, we have parted with Jagenberg since for some time now, mechanical engineering has no longer belonged to our core business. At the same time, we are happy to have found in Kleinewefers a notable owner for Jagenberg and Kampf." Rheinmetall AG had acquired Jagenberg-Werke AG in 1981. Since the start of 2000, the company has had the status of a financial investee. ============= H U N G A R Y ============= MALEV HUNGARIAN: Strategy Could Include Selling Two Planes ---------------------------------------------------------- Struggling Malev Hungarian Airlines Rt is reportedly planning to sell its two Boeing 767 airplanes for a few hundred thousand dollars, online news agency Bluebull said, citing a press report. Cash-strapped Malev has struggled to stay afloat since it posted losses of EUR36.2 million in 2000. It has been searching for a partner when its owner, the State Privatization and Holding Rt, failed to sell a 50% stake in the company to a strategic investor through a tender in January. It hopes to break even in 2003. Malev spokeswoman Adrienn Krebs did not confirm or deny the news report, only stating that "the company's strategy is being worked out now" and that "it's too early to reveal details about it." The strategy is set to be disclosed in 2 weeks, Bluebull said. Malev's planned winter schedule has no New York and Toronto flights. ============= I R E L A N D ============= ELAN CORPORATION: Spectral Fulfills Termination Agreement --------------------------------------------------------- Spectral Diagnostics Inc. announces that it has paid Elan Corporation, plc. CA$1.2 million owing to it under the joint venture termination agreements. As a result of the payment, the development loan of CA$4.8 million and accrued interest has been extinguished, as previously agreed. Under the terms of the joint venture termination agreements, Elan has rights to a royalty of future sales of the Endotoxin Activity Assay. Spectral Diagnostics Inc. regains all intellectual property and marketing rights associated with the EAA, and the sepsis diagnostics system. "This payment to Elan follows our successful private placement," stated Dr. Paul M. Walker, President, and CEO of Spectral Diagnostics Inc. "We are now in a position to begin marketing this novel assay. The EAA is the first FDA cleared assay to determine a patient's risk for developing severe sepsis when admitted to the ICU. Sepsis continues to be a source of high mortality and health expense in North America and Europe. Early identification of patients at risk, and initiation of appropriate therapeutic interventions has shown beneficial effects on outcome." The incidence of sepsis continues to grow, even now affecting more than 750,000 patients annually in North America, a higher incidence than colon cancer, breast cancer, or congestive heart failure. Sepsis is the leading cause of death in noncoronary intensive care units, and the 11th leading cause of death in the U.S. overall. It carries a mortality rate similar to that associated with heart attacks in patients not hospitalized. The economic burden on hospitals is significant, as patients who have developed severe sepsis require prolonged stays in the intensive care units with rigorous support of failing organs. Spectral is a developer of innovative technologies for comprehensive disease management. Spectral provides accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products are rapid format tests measuring markers of myocardial infarction (Cardiac STATusr test). New products include rapid diagnostics for infection (the Endotoxin Activity Assay). The EAA and Cardiac STATusr products are manufactured by Spectral Diagnostics Inc. Spectral's common shares are listed on the Toronto Stock Exchange: SDI. KBC ASSET: Announces Job Cuts, Departure of Chief Executive ----------------------------------------------------------- KBC Asset Management announced plans to axe 22 jobs under a restructuring plan aimed at containing falling revenues. According to BizWorld, it is understood that the job cuts will be mainly back office and administrative roles, and do not include the position of senior investment advisers. KBC's investment funds were underperforming lately, with its managed pension fund faring the worst over a one and three year period, according to the most recent figures from consultant Mercer. The asset manager was further doomed by the loss of a contract to manage the pension of Ulster Bank, its largest client. Concurrent with the job cuts, KBC Asset management also announced the resignation of its chief executive Gavin Caldwell, who headed the company since 1980. He will be replaced by Sean Hawkshaw. The report cited the company saying that when it bought the business off Ulster Bank in 2000, Caldwell had given an undertaking to stay on for three years to oversee the transition. ===================== N E T H E R L A N D S ===================== HAGEMEYER: Long-term Viability Continues to Hang in Balance ----------------------------------------------------------- Dutch electrical and safety equipment distributor, Hagemeyer, expects its second debt restructuring since late last year to take months, according to the Financial Times. The report cited the company saying that after securing a temporary waiver from banks and other lenders with whom it had breached certain loan covenants, it still has to secure a longer waiver to allow it 18 months to two years to come up with a financial recovery plan. Chief executive Rob ter Haar said the key to the plan is the reduction of debt and turning around its operational earnings. He did not rule out an issue of fresh equity, as he said, all options were being investigated. Proceeds from divestment previously helped the loss-making company trim down interest bearing debt to EUR896 million from EUR1.15 billion a year ago, but a failure to properly implement a U.K. IT system forced it to an operational loss, and breached certain covenants. The company posted a first-half net loss of EUR129.3 million (US$140.95 million). Hagemeyer, which has cut 1,300 jobs from its 22,000 workforce this year, also replaced a EUR400 million credit facility, due to mature this year, with a EUR500 million facility expiring in four years. It expects a 2003 net charge for exceptional items of about EUR100 million for restructuring. The company is predicting full year loss at the cash earnings level to exceed EUR200 million. ROYAL PHILIPS: Restructuring Will Not Affect Barcelona Plants ------------------------------------------------------------- Royal Philip's two plants in Spain will not be affected by the closure of the Dutch consumer electronics giant's 50 factories around the world. According to Kiplinger.com, Philips said it has no plans to close its Spanish and Portuguese subsidiary. The units made an operating profit of EUR20 million last year, an increase of 17.6%. A total of 1,100 employees work in the two Spanish plants that are located in Barcelona. Philips is trying to rationalize its production again after it posted losses last year. It has been trying to reduce losses over the years and CEO Gerard Kleisterlee has been forced to lay off 50,000 of the company's staff. Unfortunately, these steps were not enough and the company still needs to lower costs. The alternative is to close down other factories of its 150 facilities by 2005. Only industrial units with outstanding results will survive. UNITED PAN-EUROPE: Supreme Court Dismisses Dutch Akkoord Appeal --------------------------------------------------------------- United Pan-Europe Communications N.V. (EURONEXT Amsterdam: UPC) gives notice that, as expected, the Dutch Supreme Court has announced the rejection of the appeal by Intercomm Holdings L.L.C., a creditor in the Dutch moratorium proceeding with a EUR1.00 claim and one vote, who appealed the Dutch Court's ratification of the UPC Akkoord. The Supreme Court has ruled in favor of UPC. UPC is therefore pleased to announce that it is as of Tuesday out of the suspension of payments or moratorium procedure in the Netherlands and will emerge from restructuring. It is expected that the newly formed financial holding company UGC Europe, Inc. will be listed on the Nasdaq National Market on September 3, 2003 under the ticker symbol UGCE. It is expected that former bondholders in UPC and holders of UPC's American Depositary Receipts, ticker symbol UPCOY, will be able to trade their UGC Europe shares as of September 3, 2003. In addition, UPC announces the Dutch Implementing Offer will be rendered unconditional at the close of business in Holland on Friday August 29, 2003 (the Dutch Implementing Offer was previously scheduled to expire on September 1, 2003). This will allow the holders of UPC ordinary A shares, domiciled outside of the United States, who tendered their shares in the Dutch Implementing Offer, to trade their newly acquired UGC Europe shares on Nasdaq National Market as soon as possible following the date of the listing of UGC Europe becoming effective. It is expected that these shareholders will be able to trade their UGC Europe shares as from September 5, 2003. Following the expiration of the Dutch Implementing Offer on Friday August 29, 2003, at 15.00 CET, holders of UPC ordinary A shares that have not participated in the Dutch Implementing Offer and who are resident outside of the US, will have a last opportunity to tender their UPC ordinary shares A to UPC in exchange for UGC Europe shares. This further offer will expire on Thursday September 4, 2003, at 15.00 CET. It is expected that the settlement of the Dutch Implementing Offer will start on Wednesday September 3, 2003 and will be finalized on Tuesday September 9, 2003. It is expected that September 4, 2003 will be the last day of trading for UPC ordinary shares A on the Euronext Amsterdam with the listing terminating on September 5, 2003. United Pan-Europe Communications N.V. is one of the leading broadband communications and entertainment companies in Europe. Through its broadband networks, UPC provides television, Internet access, telephony and programming services. UPC's shares are traded on Euronext Amsterdam Exchange (UPC) and in the United States on the Over The Counter Bulletin Board (UPCOY). UPC is majority owned by UnitedGlobalCom, Inc. (NASDAQ: UCOMA). =========== P O L A N D =========== BANK PEKAO: Fitch Raises Individual Rating to C from C/D -------------------------------------------------------- Fitch Ratings, the international rating agency, has raised the Individual rating of Bank Polska Kasa Opieki SA (Pekao) to 'C' from 'C/D'. Its Long-term and Short-term ratings have been affirmed at 'BBB+' and 'F2' respectively and are constrained by the sovereign ceiling for Poland. The Support rating is affirmed at '2' and the Outlook on the Long-term rating is Stable. Pekao is the second largest bank in Central and Eastern Europe by equity. It is 53.2%-held by the Italian banking group, UniCredito Italiano (rated 'AA-' ('AA minus') and its ratings reflect the business and management benefits it gains from being part of this group as well as any potential support it could receive from it, in case of need. The rating action reflects the bank's strong market position and franchise, strict cost control, improvement in risk management and sound capitalization. Together with its parent, Pekao has initiated a strong commercial drive: customers have been segmented, higher value-added products are being introduced and sold in an expanded distribution network. Furthermore, a focus on cost reduction has resulted in a 33% cut in the work force in the three years to the end of 2002. Efficiency is expected to increase further with the full implementation of a new centralised IT system, which will allow for fewer back office employees. Overall, before provisions, operating profitability compares very well with its international rivals. Furthermore, ample customer deposits have kept liquidity relatively strong and market risk is being eliminated. Its Tier 1 capital ratio of 17.5% at the end of June 2003 is amongst the strongest in Poland. Nonetheless, some concerns remain. Asset quality has suffered tremendously from the negative macro economic environment which has increased classified loans and which has resulted in a stall in new lending. Lost loans have risen to account for a significant 13.2% of total loans, although these were adequately reserved by international standards. The total is also somewhat overstated by the difficulty of writing-off old loans, which Fitch understands to be fully reserved. Pekao has intensified loan recovery efforts and various alternative avenues for reducing classified loans are being explored. Some reductions in substandard and doubtful categories were seen in the first half of 2003. Some problems exist in some loss-making subsidiaries (notably the leasing subsidiary and Jupiter) but these are being restructured or sold. LOT AIRLINES: Cancels Flights to Basra Due to Security Concerns --------------------------------------------------------------- Poland's national carrier, Lot Polish Airlines, has cancelled its first flight to the southern Iraqi city of Basra after Iraqi authorities refused to guarantee the security of the flight. Security concerns in Iraq following the bombing of the U.N.'s mission in Baghdad last week and continuing attacks on coalition soldiers, led to the warning, Defense Ministry spokesman Col. Eugeniusz Mleczak said, according to Dow Jones. Two weeks ago, LOT Polish Airlines and six other carriers were officially granted by the Coalition Provisional Authority the initial rights to fly to Iraq, each being allowed one operation a week. LOT's flight was scheduled early morning of August 27. It was to be the first commercial flight by an airline from outside the Middle East since 1991. LOT spokesman Pawel Klimiuk preliminarily refused to confirm or deny the cancellation, but later said in a statement that the airline has cancelled its flights on three consecutive Wednesdays after Basra airport authorities decided to suspend all planned flights. Scandinavian airline SAS and British Airways, two other foreign carriers authorized by the U.S.-led Iraqi administration, say they are planning two weekly flights to Iraq each, but haven't set dates yet, citing security concerns. LOT is a member of the bankrupt Sairgroup and it has not seen any profit on its operations since 1997. It posted a net profit in 2002, but this is because some of its aircraft were resold to their easing companies. The airline said it expects its first flight to Basra to take place September 17. =========== S W E D E N =========== BEVE ELECTRONICS: Mitec Telecom Sells Troubled Electronics Unit ------------------------------------------------------------- Mitec Telecom Inc., a leading designer and provider of wireless network, satcom and radio frequency products for a variety of industries, announced that it has signed a Business Transfer Agreement with NOTE AB of Sweden to sell the assets of BEVE Electronics AB, Mitec's principal manufacturing operation in Sweden. NOTE AB is one of Sweden's leading electronics manufacturing services providers and a prominent member of a global EMS alliance. The deal is structured as a cash transaction. It will significantly decrease Mitec's debt level, and allow all of BEVE's creditors to be paid. Both NOTE's and Mitec's Boards of Directors have approved the agreement, and the sale is expected to be completed by August 29, 2003. Mitec's real estate assets in Sweden are not part of the agreement, and are being sold separately. "With this agreement, the company-wide consolidation strategy that we put into action nearly a year ago is virtually complete," said Keith Findlay, Mitec's Executive Vice President, Finance and CFO. "One of our key goals is to ensure the continuity of supply to our customers and the transition plan being implemented is expected to achieve this important objective. This will allow Mitec to focus on its core business with direct presence in Canada, the U.S., the U.K. and China. "The cash deal also improves Mitec's consolidated financial position," Mr. Findlay added. "Moreover, we will be able to reduce our debt further when our Swedish real estate assets are sold. This makes us a much more viable organization, and enables us to compete more aggressively in our core markets. Finally, I am pleased to report that we have also entered into a three-year supply agreement with NOTE to furnish them with our satcom products." About Mitec Telecom Mitec Telecom is a leading designer and provider of products for the telecommunications industry. The company sells its products worldwide to network equipment providers for incorporation into high-performing wireless networks used in voice and data/Internet communications. Additionally, the company provides value-added services from design to final assembly and maintains test facilities covering a range from DC to 60 GHz. Headquartered in Montreal, Canada, the company also operates facilities in the United States, Sweden, the United Kingdom and China. Mitec Telecom Inc. is listed on the Toronto Stock Exchange under the symbol MTM. On-line information about Mitec is available at http://www.mitectelecom.com LM ERICSSON: Still Cautious Regarding Market Outlook ---------------------------------------------------- Telecoms equipment company Ericsson is sticking to its second quarter market outlook despite positive developments regarding orders, according to BizWorld. The report quoted group's chief executive Carl-Henric Svanberg saying: "We gave a [market] picture at the second quarter and it is very much the same we are looking at [now]." In its second quarter report in July, Ericsson, the world leader in mobile systems, said that although the market for mobile systems was unlikely to deteriorate any further, it would still be more than 10% smaller in dollar terms than in 2002. It is currently holding on to the outlook despite receiving large orders, including a US$600 million contract from China MobilCom, a five-year mobile phone equipment contract from US Rural Cellular Corporation of an undisclosed value, a GSM network order from Bangladesh's GrameenPhone, and 3G network deals from Vodafone and Cosmote in Greece. It also got a wireless network order from Cincinnati Bell Wireless, a US$32m deal from China's Guangdong Mobile Communication Corp, a US$125m order from SingTel and a deal of an undisclosed value from AT&T Wireless Services for a 3G network, the report noted. =========================== U N I T E D K I N G D O M =========================== CANARY WHARF: Chairman Signals Interest in Submitting Bid --------------------------------------------------------- Paul Reichmann, Canary Wharf's chairman, said he might form a group to bid for the British property company, which is currently suffering from the slowdown in the real property market, according to BBC News. Mr. Reichmann expects other potential buyers -- which reports say could include the Canadian conglomerate Brascan, and U.S. investment banks Morgan Stanley and Goldman Sachs -- to also lodge bids. But analysts say nobody may turn in a bid at all because of the slowdown in the sector as a result of the global economic crisis. Commercial property firms have suffered from low occupancy and falling rental values in recent months. Canary Wharf, which was founded in the 1980s, fell down during the stock market crash of 1987. It was bailed out by a group of banks and then sold. It recovered during the late 1990s but encountered difficulties again after the September 11 attacks discouraged interest in skyscrapers. Mr. Reichmann already controls about 80% of Canary Wharf's shares, which owns Britain's tallest building in its London Docklands complex. EASYJET: Founder Divests More Stake to Fund New Businesses ---------------------------------------------------------- Easyjet founder Stelios Haji-Ioannou sold a further GBP19 million of shares in low-fare airline EasyJet to fund four new ventures, according to the Telegraph. Mr. Haji-Ioannou wants to diversify into minibus, pizza delivery, budget hotel and cruise holiday ventures over the next two years despite heavy losses from his investments in Easy empire. The business incurred an estimated GBP130 million losses from developing his easyGroup start-up businesses. The losses are mostly due to his Internet cafes, now remodelled as franchises, and the easyCar vehicle rental business. At one time the cafes had a cash burn of about GBP3 million a month of revenues of GBP1 million. "The worst is over" for the Internet cafes, according to Mr. Haji Ioannou. He said he had taken a "basket case and made it almost break even. Because I value the Easy brand and I didn't want to have a bankruptcy on my hands, I had to roll up my sleeves and sort it out". He admitted though that the process of diversifying is far from easy, and warned that there would be more sales to come. Mr. Haji-Ioannou sold 8 million sales equivalent to just over 2pc of the stock. The divestment left him with only a 17.8% holding. ELDRIDGE: CI Traders Confirms Bid Talk But Won't Promise Deal ------------------------------------------------------------- CI Traders, the Channel Islands-based company, confirms that it has discussed a possible bid for Eldridge Pope, but denied having reached specific agreements with the company. The retail and leisure group, which claimed to have been invited for a talk by Eldridge Pope itself, said active discussions are not at present time ongoing, according to AFX. Eldridge Pope is reportedly not in favor of a 165 pence a share offer for the company's 19.31% stake from SDA Ltd., a company owned by Michael Cannon. Under SDA's offer, Michael Cannon and SDA will eventually control an aggregate 29.99% of the company's ordinary shares, the maximum allowed without making an offer for the whole company. Eldridge Pope in a letter to shareholder earlier this month called the offer "opportunistic." CIT said it will consider the outcome of the offer when the board decides whether to bid for Eldridge Pope or not. "There can be no certainty that an offer from CIT will be forthcoming. A further announcement will be made if appropriate," it concluded. The tender offer closes August 28. EXETER INVESTMENT: Board Approves Proposed Sale of Contract ----------------------------------------------------------- At the Extraordinary General Meeting of the company held on Tuesday the resolution to approve the Disposal was duly passed. Completion of the Disposal is expected to be effective on September 1, 2003. Terms defined in this announcement have the same meaning as those contained in the announcement dated August 5, 2003. **** Exeter Investment said earlier this month that its subsidiary, EFM, has conditionally agreed to sell the rights to manage the Funds to New Star for a maximum cash consideration of GBP10.0 million. The initial consideration comprises up to GBP9.0 million in cash payable at Completion, and deferred cash consideration of up to GBP1.0 million payable one year and ten days after Completion. CONTACT: EXETER INVESTMENT GROUP PLC Phone: 01392 256600 Mark Kemp-Gee, Chief Executive John Wynne, Finance Director BROADGATE Phone: 020 7726 6111 Roland Cross F.C.P. LIMITED: Reports Administrative Receivers' Appointment ------------------------------------------------------------- Registered number: 03167289\ Trade classification: Other business - 7487 Date of appointment of Joint Administrative Receivers: July 4, 2003 Name of appointer: Riggs Bank Europe Limited CONTACT: RSM ROBSON RHODES LLP 186 City Road London EC1V 2NU Contact: Michael Jonathan Christopher Oldham Geoffrey Paul Rowley Joint Administrative Receivers (office holder nos 7817 and 8919) FINSBURY LIFE: Petitions to Cancel Shares Premium Account --------------------------------------------------------- Notice is hereby given that a Petition was presented to Her Majesty's High Court of Justice, Chancery Division on August 1, 2003 for the confirmation of the cancellation of the share premium account of Finsbury Life. Notice is further given that the Petition is directed to be heard before the Registrar of the Companies Court at the Royal Courts of Justice, Strand, London WC2A 2LL on Wednesday, August 20, 2003. Any Creditor or Shareholder of the company desiring to oppose the making of an Order for the confirmation of the said cancellation of share premium account should appear at the time of the hearing in person or by Counsel for that purpose. A copy of the said Petition will be furnished to any person requiring the same by Clifford Chance Limited Liability Partnership, Solicitors, on payment of the Regulated Charge for the same. CONTACT: CLIFFORD CHANCE LIMITED LIABILITY PARTNERSHIP 200 Aldersgate Street London EC1A 4JJ Solicitors for the Company POWERHOUSE: Receivers Working Out Possible Bids for Retailer ------------------------------------------------------------ Several offers for PowerHouse, U.K.'s third-largest electrical retailer, have already been received, receivers from Deloitte & Touche said, according to reports. Deloitte & Touche, which was appointed last week, confirmed there were talks regarding a possible sale of the business following an indication of interest from GUS, the retail chain. The inquiries were "both in respect of the business as a going concern and for elements of the group's property portfolio," the receivers said, according to the Telegraph. Nick Dargan of Deloitte said: "We are working with a number of parties who have expressed interest and are providing them with further financial information. During this period we are continuing to trade from the 130 stores." Deloitte said it hoped "the position will become clearer within the next seven days." Powerhouse last week decided to close 93 of its 223 stores, threatening the jobs of 813 people. RESOURCE TO INDUSTRY: Administrators Sell Business And Assets ------------------------------------------------------------- Henry Butcher, by order of Nigel Spearing FIPA MABRP of Spearing & Co. Regarding Resource to Industry Ltd. (In Administration), offers for sale business and assets located in Beaminster, Dorset: Features: turnover GBP1.5 million pa, 55,000 sq. ft. Leasehold Premises, Modern CNC and Conventional Sheetmetal Plant, and Range of Welders and Conveyorised Paint Plant. CONTACT: Henry Butcher Phone: + 44 (0) 117 922 0790 Fax: + 44 (0) 117 922 0798 E-mail: bristol@henrybutcher.com Contact: Neil Smith Mobile: 07748 761597 E-mail: neil.j.smith@henrybutcher.com ROYAL MAIL: Loosens Pay Stance over Threat of Industrial Action --------------------------------------------------------------- Royal Mail loosened a bit on its stance over a disputed pay package after workers union gave the green light for the start of a strike ballot following a failure of the parties to reach an agreement. Officials from the Communication Workers Union failed to turn up in a meeting arranged by Royal Mail at the offices of labor dispute conciliation service Acas in London. The union officials also had their meetings elsewhere, which they insisted was known to Royal Mail managers before the latter scheduled the talks. They denied having deliberately snubbed the invitation, according to the Telegraph. To avert an imminent nationwide industrial action, the courier is reported to have offered to loosen up some of the strings attached to its 14.5% pay offer. The productivity-linked package originally involves a two-stage basic increase worth 4.5pc payable by April. The balance will be paid when new performance targets have been reached nationally. Mellowing down, Royal said it is willing to be more flexible and allow the productivity-linked element to be paid on a piecemeal basis as each local office achieves performance improvements, according to the Telegraph. "There is no new money on the table because we can't afford it but if the changes in working in working practices are implemented we could be paying 13pc of the package by Christmas," a spokesman said, according to the report. ROYAL & SUNALLIANCE: Codan Considers Selling Life, Pension Biz -------------------------------------------------------------- Royal & Sun Alliance Insurance PLC's majority owned Codan Forsikring AS tested market interest in its life and pension operations, Ireland Online reported citing sources of Danish daily paper Boersen. Codan, which is willing to part the whole or at least a large part of the business area, reportedly approached potential European buyers about their interest in taking over the business area. The paper said the move could be connected to problems at Royal & Sun Alliance, citing as basis the company's ongoing divestment of a number of activities in New Zealand, Australia, the U.S. and Puerto Rico. It also noted Royal & Sun's statement in November about plans to reduce global activities. Last month, the firm proposed to raise GBP15 million by way of placing 750 million of new ordinary shares to reach a target cashflow positive level. It said that the net proceeds of the placing of approximately GBP14 million will be used to satisfy the general working capital requirements of the group. SANDERSON & SONS: Joint Receivers Offer Business for Sale --------------------------------------------------------- The Joint Administrative Receivers, N Kahn and N G Edwards, offer for sale the business and assets of Sanderson including its interest in its French and U.S. subsidiaries. Established in 1860, Sanderson distribures fabrics, wallpapers, prints, bed-linen, curtains and paints. The company includes the Morris & Co. brand, which presents original fabrics and wallpapers designed by William Morris. The assets available include: archive and design studio, international license business, turnover of GBP23 million, 180 employees, U.K. retail including 80 concessions, trade distribution in U.K. and over 60 countries worldwide, overseas showrooms in New York and Paris, and wallpaper and bedding production facilities. Customers include, House of Fraser, John Lewis, Debenhams, Selfridges. For details of Sanderson business and assets please contact David Harding or Tom Keir at Sanderson House, Oxford Road, Denham, Buckinghamshire UB9 4DX, at telephone number 01895 830028, or e- mail at receivers@a-sanderson.co.uk * Dewey Ballantine Hires Leading German Finance Partner ------------------------------------------------------- International law firm Dewey Ballantine LLP announced that it has hired top finance and capital markets lawyer Philipp von Ilberg as a partner resident in its Frankfurt office. He will join Dewey Ballantine on October 1, 2003 from Clifford Chance Punder. Mr. von Ilberg will play a key role in Dewey Ballantine's expansion in Germany. The wealth of experience he brings to the Firm in ground-breaking capital markets and corporate finance transactions as well as in the area of acquisition finance will complement and enhance the Frankfurt office's existing corporate and finance capabilities. "Philipp von Ilberg's appointment represents a significant step for Dewey Ballantine in the continued development of our German practice," said Morton A. Pierce, Chairman of Dewey Ballantine's Global M&A Group. "Philipp's expertise will greatly contribute to the development of our corporate and finance practice in Germany and is an important step forward for our broader European strategy." Mr. von Ilberg began his legal career at Deutsche Bank Corporate Finance and joined Clifford Chance Punder in 1997 where he was made partner. His practice has involved the representation of corporations such as Deutsche Telekom, Fraport, Siemens, and T- Online as well as financial institutions such as Credit Suisse First Boston, Deutsche Bank, Dresdner Kleinwort Wasserstein and West LB. Dr. Geza Toth-Feher, head of Dewey Ballantine's German Practice, said: "Philipp von Ilberg is a blue-chip addition to our German team. We are delighted that Philipp is joining our firm in Frankfurt, and excited about providing clients with an even deeper reserve of finance capabilities." Philipp von Ilberg commented: "I am looking forward to playing a significant part in the growth of Dewey Ballantine's German practice. My practice dovetails neatly with Dewey Ballantine's close relationships with the investment banking community and complements the Firm's focus on expanding those relationships across Europe." About Dewey Ballantine Founded in 1909, Dewey Ballantine LLP is a leading international law firm with more than 550 attorneys located in New York, Washington, D.C., Los Angeles, Palo Alto, Houston, Austin, London, Warsaw, Budapest, Prague and Frankfurt. Dewey Ballantine's German Practice in London and Frankfurt builds on the strength of the London office's UK and U.S. corporate and finance capability to provide clients with expert legal advice on German-related M&A, public M&A, acquisition finance, private equity and capital markets transactions. The German Practice enhances Dewey Ballantine's existing European capability and enables the Firm to advise clients on German-related issues in a seamless, integrated manner from London, Frankfurt, or both offices, as clients may require. Dewey Ballantine's German Practice currently consists of a team of ten German-speaking lawyers (two partners and eight associates), eight of whom are German-qualified or dual-qualified (German and English). ********* 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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