/raid1/www/Hosts/bankrupt/TCREUR_Public/030924.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, September 24, 2003, Vol. 4, No. 189


                            Headlines


C Z E C H   R E P U B L I C

VITKOVICE HOLDING: Lahvarna Ostrava Completes Takeover


F R A N C E

ALSTOM SA: Asset Disposal Program Moving According to Plan
ALSTOM SA: Modifies Proposed Government-led Rescue Plan
RHODIA SA: To Build 'Laboratory of the Future' in Bordeaux
VIVENDI UNIVERSAL: Urged to Focus on Phone Businesses


G E R M A N Y

INFINEON TECHNOLOGIES: Hopes to Avoid 10th Quarterly Loss


H U N G A R Y

K&H EQUITIES: Liquidation Not a Farfetched Possibility
K&H EQUITIES: Authorities Broaden Inquiry into Brokerage Scandal


I R E L A N D

ELAN CORPORATION: Restructures Joint Venture with Depomed


L U X E M B O U R G

MILLICOM TELECOMMUNICATIONS: Bares Possible Debt Pact Violations
MILLICOM INTERNATIONAL: To Consolidate El Salvador Operation


N E T H E R L A N D S

ICA AHOLD: May Sell Banking Operations, Cut Jobs to Reduce Cost
ROYAL PHILIPS: Passes Atos Origin Taxes to Belgian Unit


S W I T Z E R L A N D

SWISS INTERNATIONAL: Suspends Trading in Wake of Link-up Talks


U N I T E D   K I N G D O M

ASHTEAD GROUP: Revenues for First Four Months Down 8.3%
BALTIMORE TECHNOLOGIES: Concludes Disposal Program with PKI Sale
CANARY WHARF: Reichmann Denies Links with Any Potential Offeror
DAWSON INTERNATIONAL: May Tap Investors for Additional Funds
EMI GROUP: On CreditWatch Negative Due to Potential Merger

EQUITABLE LIFE: Former Non-Executives Challenge Damage Suit
FILTRONIC PLC: Inks Supply Deal with Unidentified OEM Customer
HIGHMAGIC LIMITED: To Hold Creditors' Meeting October 6
ROOM SERVICE: 2002 Operating Loss Reduced to GBP1 Million
SAFEWAY PLC: Philip Green Denies Backing out of Bidding

SOUND ALERT: Still Struggling to Recover Heavy Research Costs
STIRLING GROUP: Recommends Potters' GBP18.7 Million Cash Offer
STIRLING GROUP: Potter Offered the Best Value for Shareholders
STIRLING GROUP: Potter Offers GBP29.7 Million in Financing
STIRLING GROUP: Existing Directors to Enter New Deal with Potter

STIRLING GROUP: Potter Guarantees Employees' Benefits
STIRLING GROUP: To Pay Potter if Takeover Talks End Prematurely
STIRLING GROUP: Potter Pledges to Pay Convertible Notes at Par


                            *********


===========================
C Z E C H   R E P U B L I C
===========================


VITKOVICE HOLDING: Lahvarna Ostrava Completes Takeover
------------------------------------------------------
The National Property Fund on Friday finally gave the green light for the
transfer of Vitkovice shares to Lahvarna Ostrava, the firm's new owner,
according to Prague Business Journal.

The Fund prevented the takeover Monday last week by holding on to its 68.3%
stake in Vitcovice, and abstaining from voting at an extraordinary general
meeting.  This was despite the fact that Lahvarna paid a bank guarantee
worth CZK470 million for the state-held stake in the engineering part of
Vitkovice and met all terms of the contract days before.  Lahvarna paid in
August the purchase price of CZK402 million to a so-called trust account at
ING Bank.

Following the takeover, Lahvarna Ostrava co-owner Jan Svetlik, will become
general manager as well as chairman of the board.  Petr Novotny, Milan Jurik
and Jaromir Siler, will be board members.

Vitkovice serves as an umbrella for subsidiary companies.  In the first half
of this year, it posted losses of CZK234 million, which is about CZK120
million more than the management had presumed.  More than 60% of the
increase is related to staff restructuring and fulfillment of complex
program in support of Vitkovice Strojirenstvi A.S.  The other negative
influences that the management had to face were privatization and recession
in the mechanical engineering market.


===========
F R A N C E
===========


ALSTOM SA: Asset Disposal Program Moving According to Plan
----------------------------------------------------------
Alstom Chairman Patrick Kron told the press the sale of the engineering
group's transmission and distribution unit is now in the "final stages."
Alstom is selling the division to Areva for EUR950 million to help bring the
total proceeds of its disposal to around EUR2.5 billion, AFX News says.

Mr. Kron said proceeds from asset sales are expected to total around EUR2.7
billion by the end of March 2004.  Alstom expects to close the transaction
with Areva in January.  Alstom is divesting assets to avert a possible
bankruptcy.  Mr. Kron has asked the government to help him in the process.

Shares in Alstom dropped 40% this year, pegging the company's market value
to EUR800 million.  Alstom has lost 90% of its value since it went public in
June 1998.  It reported annual losses for two years due to the slump in
demand for power and stations, trains and ships and to more than EUR4
billion in costs for fixing faulty turbines.  Business also slowed down
after reports came out that Alstom may run out of cash before it could
finish orders, discouraging potential clients from transacting with the
company.


ALSTOM SA: Modifies Proposed Government-led Rescue Plan
-------------------------------------------------------
Alstom and the French Government revised its EUR3.2 billion- rescue plan for
the troubled engineering group, restricting now the state from taking a
direct equity stake in the firm.  Under the new plan, the state will
subscribe to EUR800 million worth of long-term bonds, including EUR300
million worth of convertible bonds, and Alstom's consortium of 32 banks will
refinance a further EUR2.4 billion of debt.  It will include a further
EUR1.5 billion of new credit line.

Alstom Chief Executive Patrick Kron said all of its banks approved of the
new package.  European Commissioner Mario Monti, who previously blocked a
bailout plan that necessitates the state to provide a loan and support a
fresh equity, praised the French authorities for the move, according to the
Telegraph.


RHODIA SA: To Build 'Laboratory of the Future' in Bordeaux
----------------------------------------------------------
In pursuit of its strategy to shorten the time required to bring its
innovations to the market and to give a substantial boost to its exploration
of new experimental areas, Rhodia announces the creation of its "Laboratory
of the Future" in Pessac, a town in the Bordeaux urban area.  The purpose of
this new laboratory is to host a mixed team of researchers in partnership
with the French National Center for Scientific Research.

The "Rhodia Laboratory of the Future" organized in partnership with the
National Center for Scientific Research will specialize in new methods based
on high-throughput tests combined with advanced data treatment specifically
dedicated to application and process chemistry.  The development of these
new tools and the miniaturization of experiments will boost Rhodia's
competitiveness and the quality of its research.

Organized around a multidisciplinary team, this laboratory will bring in
cutting-edge expertise in the area of computer science, electronics,
nanotechnology, automatic systems, physical chemistry and chemistry.  It
forms part of an approach aimed at making a radical conceptual,
methodological and technological break with previous methods.  The National
Center for Scientific Research, whose activities cover a vast range of
scientific expertise, will contribute the additional value of
cross-disciplinary research applied to an industrial project.

The opening of this new laboratory should create some twenty new positions
for permanent Rhodia and National Center for Scientific Research research
scientists and engineers in the local job market.  This team will also be
responsible for welcoming researchers seconded on a temporary basis from
Rhodia research centers around the world in addition to PhD students and
post-doc researchers sent to the laboratory within the framework of
agreements and partnerships with their universities of origin.

The future building, covering a total surface area of 1,800 square meters,
will be built next to the university campus of Pessac-Talence and fitted out
with high-level scientific equipment.

The Bordeaux region was chosen in particular owing to the outstanding
quality of its publicly funded research facilities (managed by the National
Center for Scientific Research and University) notably in the area of
physical chemistry, microelectronics and computer science, reinforced by a
favorable industrial fabric and the enthusiasm of the local authorities for
this new initiative.

Rhodia is one of the world's leading manufacturers of specialty chemicals.
Providing a wide range of innovative products and services to the consumer
care, food, industrial care, pharmaceuticals, agrochemicals, automotive,
electronics and fibers markets, Rhodia offers its customers tailor-made
solutions based on the cross-fertilization of technologies, people and
expertise.  Rhodia subscribes to the principles of Sustainable Development
communicating its commitments and performance openly with stakeholders.
Rhodia generated net sales of EUR6.6 billion in 2002 and employs 23,600
people worldwide.  Rhodia is listed on the Paris and New York stock
exchanges.

The National Center for Scientific Research is the largest publicly funded
research institution in France organized into 8 scientific departments; it
pursues a central mission of fundamental research and the advancement of
knowledge combined with the socio-economic application of this expertise.
Its activities encompass all areas of scientific, technical, and biological
knowledge in addition to the humanities and social sciences.  It employs a
total of 26,000 people, including 12,000 research scientists, and boasts
1,500 laboratories most of which operate in conjunction with institutes of
higher education.  For almost 20 years, it has also been running mixed
research units with the private sector, helping to promote the technological
transfer of its innovations to national industries.

                             *****

In July, Standard & Poor's Ratings Services said it revised its outlook on
France-based chemicals manufacturer Rhodia SA to negative from stable,
following poor second quarter results.  For the year to June 30, 2003,
Rhodia reported EBITDA (restated for divestitures and current foreign
exchange rates) of EUR558 million (after restructuring expense of EUR30
million), which compares with net financial debt (including securitizations)
of about EUR2.6 billion at June 30, 2003.  In addition, the group's pension
obligations were underfunded by more than EUR900 million at December 31,
2002.


VIVENDI UNIVERSAL: Urged to Focus on Phone Businesses
-----------------------------------------------------
Vivendi Universal investors are calling on Chief Executive Officer Jean-Rene
Fourtou to narrow the conglomerate's focus to its phone businesses.

Bloomberg quoted investor Patrick Wollenberg, who helps manage $15 billion
at Robeco Groep in Amsterdam, saying: "Fourtou has done the right things --
he brought the company into stability... But it doesn't make sense to have
those different businesses together.  I would rather have the choice to own
the parts I like."

If Vivendi's U.S. entertainment assets successfully merges with General
Electric Co.'s NBC, the French company will be left with businesses ranging
from the world's biggest record company to France's No. 2 phone business and
a stake in the NBC venture.

Bloomberg also quoted Romain Boscher, who helps manage $54 billion at
Groupama Asset Management in Paris, including Vivendi stock, saying Vivendi
is "going toward a spin-off with a refocus of Vivendi on the
telecommunications assets."

"In the long term, the only asset Vivendi should keep is the telecom
business -- it's the only strategic asset," he said.

Matthieu Giuliani, who helps manage about $4.2 billion at Sanpaolo IMI Asset
Management in Paris said: "Vivendi's stock suffers from a discount because
it's a conglomerate."

Mr. Fourtou himself posed the question whether Vivendi should separate the
phone and the entertainment assets, during a press conference on September
2.  "I give myself several months to find an answer," he said.

Mr. Fourtou may report this week a reduction in first-half net loss to
EUR538 million (US$616 million) from EUR12.3 billion a year earlier,
according to the average estimate of seven analysts in a Bloomberg survey.


=============
G E R M A N Y
=============


INFINEON TECHNOLOGIES: Hopes to Avoid 10th Quarterly Loss
---------------------------------------------------------
Europe's second largest semiconductor company, Infineon Technologies, hopes
to abandon nine straight quarters of losses when it reports results in the
three months to the end of September, according to the Financial Times.

Chief Financial Officer Peter Fischl told investors in Munich during a
conference Monday the German chipmaker is "well on the way" to profit.  He
said he wants to meet consensus estimates of analysts regarding its return
to black for the current fiscal fourth quarter.  After reporting losses of
EUR2.4 billion over the last nine quarters due to the slump in the D-Ram
chips market, the product that accounts for 40% of its sales looked set to
improve.

Infineon told investors present in the conference it was seeing "strong,
stable demand" for D-Ram chips and expected to see an increase in prices in
the next few weeks.  The report said Infineon expects the overall market for
semiconductors to increase 18% to US$184 billion in 2004, after growing 11%
in 2003.  The company expects growth to be mainly driven by the Asia-Pacific
region and the strengthening world economy.


=============
H U N G A R Y
=============


K&H EQUITIES: Liquidation Not a Farfetched Possibility
------------------------------------------------------
K&H Equities Rt could be wound up if it is not re-launched as a separate
company or absorbed in K&H Bank Rt, a source familiar with the brokerage's
case said, according to Budapest Business Journal.  The source said the move
could be taken to protect the good name of K&H Bank Rt, which is actually
the accountable party in the fraud scandal at subsidiary K&H Equities Rt.

So far, only Attila Kulcsar, a broker with the equities unit, has been
implicated for fraudulently promising high returns on as much as EUR76
million in investments from high net-worth and institutional investors.
Reports say Mr. Kulcsar was only acting in compliance with the bank's senior
management and not directly with the equities firm.

K&H Bank has not yet decided what to do with its brokerage arm, but it
already changed the three-person supervisory board of the equities firm last
week, K&H Equities said.


K&H EQUITIES: Authorities Broaden Inquiry into Brokerage Scandal
----------------------------------------------------------------
The inquiry into the brokerage scandal involving K&H equities proceeded to
include more executives from companies involved with the equity firm,
according to the Budapest Business Journal.

Broker Attila Kulcsar, who is at the center of the brokerage scandal
involving EUR76 million in investment, is now awaiting extradition from
Austria.  K&H Bank CEO Tibor Rejto, who admitted fraud before resigning, is
in custody.  A further 11 people were wanted for questioning in connection
with the alleged embezzlement of HUF30 billion.

The report said the investigation now includes Gabor Garamszegi, CEO of
construction firm Betonut Rt; Miklos Bitvai, the former CEO of State
Motorway Management Rt; and executives at venture capital firm Britton
Capital & Consulting Kft.  Britton Capital is accused of using K&H
customer's money provided by Mr. Kulcsar to fund financial transactions,
including the April takeover of plastics maker Pannonplast Rt.

Authorities are also looking into possible participation of state-owned
company, AAK, in the scandal.  It had HUF13 billion with the brokerage,
which K&H Equities paid back after the embezzlement scandal broke out in
June.  In mid-September, K&H Bank asked police to freeze HUF4.2 billion
(EUR16.4 million) in the bank accounts of AAK, suspecting the money was
derived from criminal activities.


=============
I R E L A N D
=============


ELAN CORPORATION: Restructures Joint Venture with Depomed
---------------------------------------------------------
Depomed, Inc. announced that it entered into a termination agreement with
Elan Corporation plc under which Elan has withdrawn from operational
involvement with Depomed Development Ltd., the joint venture between Depomed
and Elan.  Elan's right to exchange US$12 million of Depomed's Series A
preferred stock for an additional 30.1% equity interest in Depomed
Development Ltd. has been eliminated.  Depomed will continue to own 80.1% of
DDL, with the remaining 19.9% held by a subsidiary of Elan.

"We have been working to restructure our joint venture relationship with
Elan for a long time and we are pleased to have now reached an agreement
that meets the needs of both parties," said John W. Fara, Ph.D., Chairman,
President and CEO of Depomed.  "Depomed now looks forward to advancing the
Gastric Retention product candidates developed through DDL internally."

Established in January 2000, Depomed, Inc. and Elan Corporation plc
established DDL to develop products utilizing the parties' gastric retention
oral drug delivery and related technologies. Under the original contracts
governing the joint venture, Elan had the right to exchange Depomed's Series
A preferred stock for 30.1% of DDL held by Depomed.  In August 2002, Depomed
restated its balance sheet as of December 31, 2001 to record the Series A
preferred shares outside of permanent shareholders' equity.  As a result of
the termination of the exchange right on this stock, Depomed will now record
the preferred stock as permanent shareholders' equity.

Depomed's Gastric Retention Technology

Depomed's Gastric Retention (GR(TM)) System is a patented, oral drug
delivery technology designed specifically for drugs preferentially absorbed
high in the gastrointestinal tract.  Using normal physiological processes by
which the stomach retains large objects for further digestion, the GR System
swells following ingestion and is retained in the stomach for a number of
hours, while it continuously releases the incorporated drug at a controlled
rate to absorption sites in the upper intestinal tract.  The controlled
release of the drug at the preferred absorption site optimizes delivery of
the drug during the "therapeutic window," potentially maximizing its
therapeutic benefits and decreasing gastrointestinal side effects.

Depomed, Inc.

Depomed, Inc. is an emerging specialty pharmaceutical company utilizing its
innovative Gastric Retention (GR) system to develop new and novel oral
products as well as improved formulations of existing oral drugs.  Depomed's
products are designed to provide once daily administration and reduced
gastrointestinal side effects, improving patient convenience, compliance and
pharmacokinetic profiles.  Depomed's lead product, Metformin GR(TM), is
currently undergoing a second Phase III trial for the treatment of Type II
diabetes and the Company anticipates filing an NDA with partner Biovail in
the first half of 2004.  Depomed is also conducting a Phase III trial with
its once daily antibiotic Ciprofloxacin GR(TM) for the treatment of urinary
tract infections, which is expected to be complete in the first quarter of
2004.  In addition to its Phase III products, Depomed has a strong pipeline
of proprietary and co-development products based on off-patent and
over-the-counter drugs.  Additional information about Depomed may be found
at its web site, http://www.depomedinc.com

CONTACT:  DEPOMED, INC.
          Menlo Park
          Contact: John F. Hamilton
          Phone: 650-462-5900
          E-mail: jhamilton@depomedinc.com

          ATKINS + ASSOCIATES
          Trista Morrison
          Phone: 858-527-3490
          E-mail: tmorrison@irpr.com


===================
L U X E M B O U R G
===================


MILLICOM TELECOMMUNICATIONS: Bares Possible Debt Pact Violations
----------------------------------------------------------------
On August 7, 2003, Millicom Telecommunications SA, a wholly owned subsidiary
of Millicom International Cellular SA (Nasdaq: MICC), issued approximately
SEK2,556 million (approximately US$310 million) of secured notes mandatorily
exchangeable into Series B shares of Tele2 AB.

In connection with the offering of Exchangeable Notes, Millicom
Telecommunications entered into a securities lending arrangement with
Deutsche Bank AG London Branch.

Millicom has been informed by its advisors that, while the issue is not free
from doubt, the securities lending arrangement may have inadvertently
resulted in a technical breach of certain negative covenants relating to
transfers of assets contained in the indentures governing Millicom's 11%
Senior Notes due 2006 and 2% Senior Convertible PIK Notes due 2006, of which
$505 million and $63 million in aggregate principal amount, respectively,
are currently outstanding (although $110 million of the $505 million in
aggregate principal amount outstanding of 11% Senior Notes has recently been
called for redemption).

Millicom has provided notice to the trustees as required by the indentures.
There have been no defaults in required payments in respect of Millicom's
outstanding debt or in any financial ratios contained in the instruments
governing such debt.  Millicom intends to seek the approval of holders of
the Exchangeable Notes to certain changes to the terms of the Exchangeable
Notes and, with the agreement of the trustee under the trust deed governing
the Exchangeable Notes and Deutsche Bank AG London Branch, to make certain
technical amendments to the documentation relating to the Exchangeable
Notes, in order to ensure compliance with its senior debt covenants.

CONTACTS:  MILLICOM INTERNATIONAL
           Marc Beuls, President and Chief Executive Officer        Phone:
+352 27 759 101
           Home Page: http://www.millicom.com

           SHARED VALUE LTD, LONDON
           Andrew Best, Investor Relations
           Phone: +44 20 7321 5022


MILLICOM INTERNATIONAL: To Consolidate El Salvador Operation
------------------------------------------------------------
Millicom International Cellular S.A. (Nasdaq:MICC), the global
telecommunications investor, has recommenced consolidating Telemovil, its
operation in El Salvador, following the successful resolution of the
shareholder disputes with its local partners.   Telemovil is the leading
provider of cellular services in El Salvador with approximately 460,000
total subscribers as at June 30th 2003.

Marc Beuls, President and CEO of Millicom International Cellular, commented:
"The El Salvador operation has exciting potential and with some US$100
million of revenue in 2002 it is an important business in the region.  Over
time we will own 100% of the company; however this will not impact upon
Millicom's budgeted corporate cashflow.  There will now be the opportunity
to grow this operation aggressively and to improve EBITDA margins towards
the group average of over 50%."

A summary of the unaudited financial results for the year ended December 31,
2002 and for the period ended June 30, 2003 is:

SUMMARY OF FINANCIAL INDICATORS ('000 US$)


                 Half year to 06/30/2003     Full Year 2002

Revenues                54,942                  98,573
EBITDA                  23,173                  38,543

On a pro forma basis Telemovil today has approximately US$8 million of cash
and bank loans of US$30 million.

Millicom International Cellular S.A. is a global telecommunications investor
with cellular operations in Asia, Latin America and Africa.  It currently
has a total of 16 cellular operations and licenses in 15 countries.  The
Group's cellular operations have a combined population under license
(excluding Tele2) of approximately 382 million people.  In addition,
Millicom International Cellular provides high-speed wireless data services
in five countries.  Millicom International Cellular also has a 6.0% interest
in Tele2 AB, the leading alternative pan-European telecommunications company
offering fixed and mobile telephony, data network and Internet services to
17.7 million customers in 22 countries.  The Company's shares are traded on
the Luxembourg Bourse and the Nasdaq Stock Market under the symbol MICC.

                              *****

An improved liquidity position and reduced leverage as a result of the
completion of the company's exchange offer and subsequent issuance of 5%
mandatory exchangeable bonds that will help retire approximately US$167
million of 11% senior notes led Moody's to upgrade its ratings on Millicom
International Cellular SA this month.

The debt instruments upgraded were its senior implied rating (to B1 from
Caa1), issuer rating (to B2 from Caa2), and 13.5% senior subordinated
discount note due 2006 (to B3 from Caa3).  Its 11.0% senior unsecured notes
due 2006 was assigned a B2 rating.

CONTACT: MILLICOM INTERNATIONAL CELLULAR S.A.
         Marc Beuls, President and Chief Executive Officer
         Phone: +352 27 759 101
         Andrew Best, Investor Relations
         Shared Value Ltd, London
         Phone: +44 20 7321 5022


=====================
N E T H E R L A N D S
=====================


ICA AHOLD: May Sell Banking Operations, Cut Jobs to Reduce Cost
---------------------------------------------------------------
Royal Ahold's Swedish subsidiary, ICA Ahold, may cut jobs to lower costs
over the coming years, according to Dow Jones International News.  It may
also sell some assets, including its unprofitable bank operations, ICA
Banken.  The bank may be spun-off to an external partner.  The food retailer
said the bank business, together with ICA's Lithuanian operations, is
weighing on group results.

Meanwhile, Chief Executive Kenneth Bengtsson said: "We are sticking to our
profit forecast that the result for 2003 is expected to be in line with the
result in 2002.  We are reviewing costs within the whole concern, but our
core operations are basically sound."

The retailer reported an operating profit of SEK892 million (US$111.6
million) last year, compared to SEK415 million in 2001.

CONTACT:  ICA AHOLD
          170 85
          Solna, Sweden
          Phone: +46-8-585-50-000
          Fax: +46-8-585-50-009


ROYAL PHILIPS: Passes Atos Origin Taxes to Belgian Unit
-------------------------------------------------------
Royal Philips Electronics transferred its 44.7% stake in Atos Origin SA to
subsidiary Philips Belgium to save on taxes, Philips spokesman Andre Manning
said, according to AFX

The company plans to eventually sell the stake in Atos Origin, although it
has not yet determined when, Mr. Manning said.  Paris bourse regulator CMF
said it has granted Philips exemption from regulations triggering an
automatic buyout offer for Atos.

                              *****

Royal Philips is also cutting costs by transferring the final part of its
assembly operation in Drachten to China.  The site, which currently employs
2,000 people, started moving part of the final assembly operations to
Zhuhai, where shavers are mass-produced at a low cost last year.  The
company's cost saving program also includes innovative product design,
internal efficiency, reduced overheads, and a reduction in the cost of
materials.  It is also improving efficiency by cutting jobs at the Dutch
site.  The company said the moves will result to the loss of 180 jobs in
Drachten.


=====================
S W I T Z E R L A N D
=====================


SWISS INTERNATIONAL: Suspends Trading in Wake of Link-up Talks
--------------------------------------------------------------
The Swiss Stock Exchange (SWX) suspended trading in the shares of Swiss
International Air Lines at the company's request.  Trading in the shares
were halted Monday, September 22 and remained suspended until 14:00 on
Tuesday, September 23.  SWISS did not comment further on this media release.

                              *****

Swiss International Air Lines Ltd. is to decide this week whether to join
OneWorld Alliance or hold out for a buyout offer from Deutsche Lufthansa.
The Basel, Switzerland-based company is looking for a partner to help it
increase passenger numbers, further reduce expenses and attract investment
on the way to posting a profit since its creation out of the bankrupt
Swissair Group.

CONTACT:  SWISS
          Corporate Communications
          P.O. Box, CH-4002 Basel
          Phone: +41 848 773 773
          Fax: +41 61 582 3554
          E-mail: communications@swiss.com
          Homepage: http://www.swiss.com


===========================
U N I T E D   K I N G D O M
===========================


ASHTEAD GROUP: Revenues for First Four Months Down 8.3%
-------------------------------------------------------
Henry Staunton, Chairman of Ashtead Group plc, made this statement to
shareholders at the Annual General Meeting on Monday:

Year To Date Trading

Sunbelt

Following a strong August performance rental revenues in dollar terms for
the four months ended August 31 were 2.3% above the same period last year at
Sunbelt, our U.S. subsidiary.  However, lower levels of scaffold erection &
dismantling income meant that total revenues were marginally (0.5%) below
last year.  In sterling terms total revenues were down 6.4% reflecting the
weakness of the dollar.  Based on published data, Sunbelt continues to take
market share.  In the year to date four of our five regions are ahead of
last year in terms of contribution although the fifth, our West Coast
business, is suffering from still weak economic conditions.  As far as our
specialist businesses are concerned, we have achieved significant increases
in our pump and power division but declines in our scaffolding business.
Overall we have seen some improvement in rental rates reflecting a better
balance between supply and demand in terms of equipment availability and our
willingness to sacrifice a little in utilization, which is marginally behind
last year's levels.

A-Plant

In the U.K., we have seen a modest rise in business levels, since the
announcement of our refinancing in early June helped restored stability to
our A-Plant business.  Nevertheless, revenues for the four months ended
August 31, are down 6% over the previous year on a same store basis but 13%
overall following the closure in the past year of 19 profit centers and the
recent disposal of two non-core businesses.  Significant cost savings have
been achieved offsetting a substantial element of this shortfall.  We
continue to review the cost base and to increase our earnings visibility
through framework agreements with our major account customers.  In the last
year 11 new contracts have been signed, the most significant of which was
our recent appointment as preferred supplier to Laing O'Rourke.  We have
successfully maintained the revenues derived from our top 100 customers who
accounted for one-third Of A-Plant's turnover in the four months to August
31, 2003.

Ashtead Technology

Ashtead Technology has achieved revenues marginally behind last year, but
this shortfall has been offset by improved margins.

Group

Group revenues for the first four months were 8.3% below last year, 4.6% in
constant currency.  On a same store basis, rental revenues at constant
currency are down 1% over the same four months in the previous year.
Following our very difficult second half last year we are once again
generating profits before tax, goodwill and exceptionals (which relate to
our refinancing), although not presently on a par with last year's levels.

CASHFLOW AND FINANCING

Although the early months of our financial year normally produce a cash
outflow, tight cash controls have secured a reduction in debt levels of
GBP22 million in the first four months, mainly as a result of lower capital
expenditure and higher disposal proceeds.  We would still expect the
investment in our rental fleet during the current year to be close to last
year's level and our debt levels to continue to reduce.

Following the extension of our bank facilities until January 2005 we advised
shareholders that we were confident of achieving further longer term
financing well in advance of that date.  We are actively investigating the
most appropriate means of achieving this with our financial advisers.

OUTLOOK

According to figures published by the U.S. Department of Commerce,
non-residential construction fell almost 30% from its March 2001 peak but
has now stabilized and indeed is showing a marginal increase over the ten
months since last September.  Against this background we are seeking to
maintain Sunbelt's recent momentum.  We are anticipating some improvement in
our scaffolding business in the coming months and continued strength in our
pump and power business.  We have also developed a disaster recovery
capability, which has been very active during the recent power shortages in
the northeastern United States and in dealing with the aftermath of
Hurricane Isabel.

Ashtead Technology has also seen some improvement in its North American
business, although California has been a difficult market.

In the U.K. we see a weaker commercial construction market but continued
strong PFI activity.  We are looking to expand our Tool Hire Shop division
following the achievement of same store sales growth in the four months to
August 31.

We note some more positive statistics in terms of the U.S. economy and are
encouraged by some signs of rental rate improvements.  Nevertheless we
believe it appropriate to continue our cautious stance of anticipating
generally flat market conditions for the Group as a whole in the current
year.

                              *****

Earlier this year, the company announced it would default on existing
banking agreements on March 13 due to the discovery of an accounting
irregularity at U.S. subsidiary, Sunbelt Rentals Inc.  The group eventually
reached an amended medium term senior debt facility with creditor banks that
waived previous defaults.

CONTACTS:  ASHTEAD
           George Burnett, Chief Executive
           Ian Robson, Finance Director
           Phone: 01372 362300

           David Trenchard
           Alexia Latham
           TULCHAN COMMUNICATIONS
           Phone: 020 7353 4200


BALTIMORE TECHNOLOGIES: Concludes Disposal Program with PKI Sale
----------------------------------------------------------------
Baltimore Technologies plc (London: BLM) announced that it has entered into
a conditional agreement with beTRUSTed to sell its core PKI business for a
total consideration of GBP5.0 million in cash.  The sale is subject to
approval by Baltimore's shareholders at an Extraordinary General Meeting,
and a circular with notice of the Meeting will be sent shortly.

Following the recently announced sales of SelectAccess, OmniRoot and Managed
Services, the sale of the PKI business completes Baltimore's disposal
program.  Once completed, these transactions, together with the settlement
with Clearswift, will have generated total cash proceeds of approximately
GBP20.9 million since July.  The sale of SelectAccess to HP has now closed
and funds have been received on September 18, 2003.

Bijan Khezri, Chief Executive Officer of Baltimore Technologies plc,
commented: "We firmly believe in the need for scale to continue driving
consolidation of the software industry worldwide.  The long-term
competitiveness of the PKI business requires critical mass and beTRUSTed has
emerged as an excellent partner to take our PKI technology and customer base
to its next level.

"This transaction is our last significant asset disposal and will deliver on
our commitment to eradicate operational cash burn and maximize shareholder
value.  The cash balance resulting from Baltimore's successful asset
disposals effectively puts the future strategic options available to
Baltimore Technologies into a new perspective.  We remain committed to
maximizing value for our shareholders and we look forward to providing an
update in due course."

"We are extremely pleased to acquire the Baltimore PKI business and its
world-class clients, employees and software.  Over 75% of our clients have
made significant investments in Baltimore's PKI suite, which we have
implemented and operated for many years.  We believe that beTRUSTed's
ownership will provide the necessary stability and support for existing and
prospective clients to build and deploy critical business applications that
leverage Baltimore's technology," said John Garvey, Chief Executive Officer
of beTRUSTed.

Rationale for the divestment

Since the launch of the controlled sale process in May, Baltimore has
believed that the company lacks critical mass.  During the course of the
past two years the company has succeeded in significantly reducing
operational cash burn.  However, Baltimore alone does not represent a
platform on which to consolidate.  The need for scale in today's
infrastructure software market makes the disposal of Baltimore's core PKI
business an obvious proposal.  As a highly customer-centric organization, it
is critical for Baltimore to provide a sustainable long-term direction to
our customers.  beTRUSTed represents an ideal partner in that regard.

Financial effect of the disposal

The Company intends to use the cash proceeds of GBP5.0 million from the
disposal, payable at completion, for general corporate purposes.  Baltimore
expects that the disposal will complete by the end of November 2003.

Restructuring

As a result of this transaction, certain PKI employees will transfer to
beTRUSTed.  The PKI group will remain principally Ireland-based.  Baltimore
will implement a redundancy program for the majority of its remaining
employees.

Information on PKI business

The PKI business is the core of Baltimore's ongoing revenue generating
business.  With over 300 customers worldwide in the high-end government,
finance and telecommunications market, Baltimore's flagship product,
UniCERT, is the world's leading PKI infrastructure.  Baltimore's PKI
products ensure organizations can securely leverage the power of web and
wireless networks, for cost-efficient commerce and collaboration, to achieve
a sustainable competitive advantage while reducing overall risk.

Based on unaudited management information for the twelve-month period ended
December 31, 2002, the PKI business generated revenues of GBP19.3 million
and a loss before interest and tax of GBP11.1 million.  As at December 31,
2002, the net liabilities of the PKI business were GBP42.8 million.  This is
largely represented by an intercompany payable to the parent company for the
funds, which were made available to the business, from the fundraising
exercise carried out in 1999.

About Baltimore Technologies

Baltimore Technologies' products, professional services and solutions solve
the fundamental security needs of e-business.  Baltimore's e-security
technology gives companies the necessary tools to verify the identity of
whom they are doing business with and securely manage which resources and
information users can access on open networks.  Many of the world's leading
organizations use Baltimore's e-security technology to conduct business more
efficiently and cost effectively over the Internet and wireless networks.

Baltimore's products and services are sold directly and through its
worldwide partner network, Baltimore TrustedWorld.  Baltimore Technologies
is a public company, principally trading on London (BLM).  For more
information on Baltimore Technologies please visit http://www.baltimore.com

About beTRUSTed

beTRUSTed is the premier global provider of security and trust services to
the world's leading organizations and government agencies.  Through its
managed security services, beTRUSTed offers clients a comprehensive package
of leading security products coupled with unrivalled expertise to help
reduce costs, increase revenue and comply with government and industry
regulations.

CONTACT:  SMITHFIELD FINANCIAL
          Phone: +44 20 7360 4900

          Andrew Hey
          Phone: +44 20 7903 0676

          Nick Bastin
          Phone: +44 20 7903 0633

          Will Swan
          Phone: +44 20 7903 0647


CANARY WHARF: Reichmann Denies Links with Any Potential Offeror
---------------------------------------------------------------
This announcement is made by Paul Reichmann in response to weekend press
reports linking Mr. Reichmann with a potential offeror for Canary Wharf
Group plc.

Mr. Reichmann's position remains as announced on August 26, 2003. Mr.
Reichmann will make a decision as to whether to join a third party offeror
or seek to form a consortium himself when it has been established whether
the offer terms (including the value of the consideration offered) proposed
by a third party offeror are acceptable to him.  This position has not yet
been reached and therefore no agreement exists between Mr. Reichmann and any
potential offeror.

                              *****

Canary Wharf, which is currently suffering from the slowdown in the real
property market, 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.


DAWSON INTERNATIONAL: May Tap Investors for Additional Funds
------------------------------------------------------------
Dawson International could announce plans to issue new shares to raise about
GBP15 million in an attempt to bolster finances, according to The Scotsman.

The report said it could offer 1.2 new shares for every ordinary share,
which if discounted could raise GBP15.6 million.  A one-for-1.5 rights issue
would raise about GBP19 million.  A spokesman for the Kinross-based group
said a rights issue is being considered, but the firm has not fixed its
refinancing plan on it yet.

"At this stage nothing is ruled in and nothing is ruled out," he said.

The cashmere group was forced to ask its largest shareholder, Guinness Peat
Group, for a GBP5 million loan after Clydesdale bank withdrew its credit
facilities three months ago.  Its current credit facilities are good only
for six months.  Dawson, which recently reported a 56% increase in
first-half losses, has GBP14.8 million in debts.  It needs GBP2 million a
year to fund higher pensions.


EMI GROUP: On CreditWatch Negative Due to Potential Merger
----------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings on U.K.-based
music producer and distributor EMI Group PLC and related entities --
including its 'BBB-/A-3' corporate credit ratings on the group -- on
CreditWatch with negative implications.  The rating action follows
confirmation from EMI that it has entered nonexclusive discussions with AOL
Time Warner Inc. (BBB+/Watch Neg/A-2) concerning a possible acquisition of
the Warner Music Group's recorded-music division.

"The CreditWatch placement reflects Standard & Poor's uncertainty over the
capital structure of any potential transaction between EMI and AOL Time
Warner," said Standard & Poor's credit analyst Trevor Pritchard.  "Few
details are available because the discussions are described by EMI as being
at a very preliminary stage and, furthermore, any proposed deal would
require approval from EMI's shareholders as well as regulatory authorities."

EMI and Warner Music have roughly similar global market shares.  Whereas EMI
has a stronger share in Europe, Warner has a stronger representation in the
large North American market.  Together, EMI and Warner could have a similar
global share as Universal Music Group, a division of Vivendi Universal SA
(BB/Watch Pos/B), at about 24%.  If achieved, the combination of EMI's and
Warner's recorded music businesses could offer marketing benefits and scope
for rationalization in the face of the highly challenging music market.

Standard & Poor's will monitor developments of EMI's discussions with AOL
Time Warner.  If a transaction with Warner Music does materialize, then the
terms will be assessed for their effect on the group's credit quality.


EQUITABLE LIFE: Former Non-Executives Challenge Damage Suit
-----------------------------------------------------------
Equitable Life's former non-executives, who are facing cases over the
near-collapse of the insurer in 2000, insisted in their defense before the
High Court that they could not be realistically held liable for missing to
spot a fatal legal anomaly in its bonus scheme.

The executives include former Equitable Chairman John Sclater, original
National Lottery boss Peter Davis and Jennie Page, ex-chief executive of the
Millennium Dome, and six others.  They are facing a GBP3.3 billion- damage
suit, which centers on the board's use of differential terminal bonuses that
reduced annual bonuses for holders of guaranteed annuity rate policies in
the 1990s.

The House of Lords said in July 2000 the move breached the Equitable
Constitution.  Equitable, having to pay GBP1.5 billion in claims, was forced
to offer itself up for sale.  The executives are being blamed for not
promptly checking the legality of the bonuses and cutting other bonuses
again in 1999 and 2000 as the bear market closed in.

But Lawrence Rabinowitz QC, lawyers for the non-executives, said his clients
could not be expected to spot the small, key clue through a "dense"
statement of bonuses produced for a special board meeting in February 1996.
"We say this is simply unreal," he said.

Mr. Rabinowitz also said blaming the non-executives was "hopeless."  None of
them could afford a fraction of the damages.


FILTRONIC PLC: Inks Supply Deal with Unidentified OEM Customer
--------------------------------------------------------------
Filtronic plc, a leading global designer and manufacturer of customized
microwave electronic subsystems for the wireless telecommunications and
defense industries, announces that it has been selected by a new OEM
customer to supply initial quantities of an integrated radio frequency head
unit to be installed in 3G wideband code division multiple access (WCDMA)
base stations.

Production quantities are not expected to commence until the second half of
calendar year 2004.  The units contain power amplifiers, which incorporate
the unique, high power, compound semiconductor transistors manufactured in
Filtronic's own fabrication facility at Newton Aycliffe.  The units also
contain the up/down converters and the high-speed digital baseband interface
and processing capability.

                              *****

Standard & Poor's Ratings Services said it lowered its long-term corporate
credit rating on U.K.-based telecommunications and electronic warfare
equipment manufacturer Filtronic PLC to 'B-' from 'B' due to concerns about
the company's medium-term liquidity.  The outlook is negative.

At the same time, Standard & Poor's lowered its senior unsecured debt rating
on Filtronic, which is applicable to the company's US$94 million of
outstanding notes, to 'CCC+' from 'B-'.
"The rating action reflects Filtronic's weakened cash flow generation in
fiscal 2003, which has put increased pressure on the company's future
liquidity in the run up to the repayment of its US$94 million notes due
December 2005," said Standard & Poor's credit analyst Michael O'Brien.

CONTACT:  FILTRONIC PLC
          Professor David Rhodes
          Mobile: 07850-827-280
          John Samuel
          Mobile: 07860-614-145
          Christopher Schofield
          Phone: 01274 530622

          BINNS & CO PLC
          Peter Binns/Emmie Peryer
          Phone: 020 7786 9600


HIGHMAGIC LIMITED: To Hold Creditors' Meeting October 6
-------------------------------------------------------
In the matter of the Insolvency Act 1986, notice is hereby given that a
meeting of creditors in the matter of Highmagic Limited is to be held at The
Holiday Inn Express, Fowlers Farm, Cressing Road, Braintree, Essex CM7 8DH
on October 6, 2003 at 11:00 a.m. to consider our proposals under Section
23(1) of the Insolvency Act 1986 and to consider establishing a creditors'
committee.

Form of proxy should be completed and returned to us by the date of the
meeting if you cannot attend the meetings and wish to be represented.  In
order to be entitled to vote at the meeting, you must give to us details in
writing of your claim.

CONTACT:  Geoffrey Paul Rowley
          Gerald Clifford Smith
          Joint Administrators


ROOM SERVICE: 2002 Operating Loss Reduced to GBP1 Million
---------------------------------------------------------
Chairman's Statement

I am pleased to present my report on the Group's activities and financial
results for the year ended December 31, 2002.

Trading

The year ended December 31, 2002 proved to be very difficult for the
company.  The company's food delivery subsidiary Room Service (U.K.)
Limited, having made a loss of GBP430,000 during the year, was put into
members' voluntary liquidation in January 2003.

The results of Room Service (U.K.) Limited have not been included in these
consolidated financial statements, on the basis that to do so would be
inconsistent with the requirement to give a true and fair view.

The consolidated profit and loss account shows that the Group incurred an
operating loss for the year of GBP1.091 million (2001: loss GBP3.574
million) from turnover of GBP0.017 million (2001: GBP0.991 million).

The loss on ordinary activities before taxation was GBP2.837 million (2001:
loss GBP5.504 million).

As a result of the liquidation the preparation and audit of the Company's
financial statements for the year ended 31 December 2002 was delayed
resulting in a temporary suspension of the Company's shares pending
publication of the company's Report and Financial Statements.

The auditors have drawn attention to the 'going concern' status of the Group
because there are at present no trading businesses while there remain a
number of creditors outstanding.  On April 3, 2002, Hanover Capital Group
plc announced that it was to acquire the outstanding debt of GBP216,000 from
the creditors of Room Service Group plc.

In the event, Hanover only succeeded in acquiring debt of GBP119,760 from
the creditors of the Group, leaving GBP96,740 outstanding.  The directors
have been notified that Chiddingfold Investments Limited has acquired the
Hanover debt and has accordingly become a creditor of the Group.

Your directors have agreed that Chiddingfold will enter into arrangements to
make a loan of GBP100,000 to the Company, convertible, subject to
shareholder consent, into ordinary shares at 1p per share after the capital
reorganization referred to below, to enable it to discharge its remaining
creditors.

During the course of the year, the company incurred a liability to Coran
Investments Limited for the provision of services.  The company has agreed
to discharge this liability by transferring its remaining investments to
Coran.  On realization, Coran shall be entitled to retain the first
GBP50,000 of sale proceeds with any surplus over GBP50,000 being shared
equally between Coran and the Company.

Included in the notice of meeting accompanying the financial statements are
details of a capital reorganization, designed as a first step towards
placing the company in a position to seek an acquisition, which would be a
reverse takeover, intended to restore some value to shareholders.

Board Changes

Alexander Duma resigned as Chairman on January 23, 2003 and I took over as
Chairman on that date.  Nicolas Greenstone and Raymond Harris are proposed
to be appointed to the board at the forthcoming Annual General Meeting.

Prospects

Following the liquidation of Room Service (U.K.) Limited, the Company has no
trading operations but still holds a small number of investments.  The
directors are actively seeking to realize the Company's investments in order
to satisfy amounts due to creditors.  They are also actively seeking
suitable acquisitions or investment opportunities, which are likely to be
classified as a reverse takeover under the AIM Rules and require shareholder
approval.

Gerald Gold
Chairman

To See Financial Statements:
http://bankrupt.com/misc/Room_Service_Preliminary.htm


SAFEWAY PLC: Philip Green Denies Backing out of Bidding
-------------------------------------------------------
Philip Green insisted he is still in the bidding for supermarkets group
Safeway plc, according to the Financial Times.

"The situation remains the same as it has for five months," Mr. Green
commented on weekend press reports suggesting he was no longer interested in
making an offer.

Mr. Green is not included in the full competition inquiry currently
conducted by the Office of Fair Trading.  The bids under scrutiny are that
of Wm Morrison, Tesco, Asda/Wal-Mart and J Sainsbury.  Wm Morrison is
believed the frontrunner in the process, encouraging chairman Ken Morrison
to step up integration work on his planned takeover ahead of the competition
ruling due this week.

"I am waiting to see the outcome of the Competition Commission's findings
before deciding what to do," he said.

Safeway plans to find other ways to realize shareholder value if it finds
the offer to low.  It might opt for a management-led buy-out or manage its
own store disposal program.


SOUND ALERT: Still Struggling to Recover Heavy Research Costs
-------------------------------------------------------------
Sound Alert is yet to see a return on its innovative fire alarm that allows
people to quickly identify the location of exits, according to Yorkshire
Today.  Heavy research and development costs plagued the company since its
incorporation in January 2000.

Its financial results for the 12 months to March 31, 2003, showed a loss of
GBP900,251 on turnover of just GBP27,943.  The figure is already a slight
improvement on the previous year's loss of GBP1.2 million, the report said.

Chairman Graham Cooper said in a statement published August 31: "The process
of converting the considerable early interest in our technology into royalty
revenues continues to be slower than expected and this has put a strain on
our financial resources."

Sound Alert sold shares and was able to turn in GBP234,000, but it was
unable to launch another round of funding in investment markets because of
the crisis following the September 11.

Mr. Cooper said: "The investment environment following Sept 11 has been
extremely risk averse and we have been unable to seek additional working
capital through second round funding in the investment markets," he added.

The company currently expects income from license agreements, which is now
under negotiation, and from further careful cost-cutting measures.

CONTACT:  SOUND ALERT TECHNOLOGY PLC
          5th Floor
          Century House
          11 St Peter's Square
          Manchester
          M2 3DN
          United Kingdom

          Contact: Bernard Turner, Finance Director
          Phone: +44 (0)1925 418181
          Fax: +44 (0)1925 418181
          E-mail: Bernard_Turner@soundalert.com


STIRLING GROUP: Recommends Potters' GBP18.7 Million Cash Offer
--------------------------------------------------------------
It was announced on December 4, 2002 that the Independent Directors had
granted the Executive Directors permission to explore the possibility of a
public to private transaction.  On June 10, 2003, Stirling confirmed in its
preliminary results announcement that discussions were continuing with the
Executive
Directors.  Furthermore, the Independent Directors announced on June 13,
2003 that the Executive Directors had indicated that they were investigating
an offer for the company at a price of 22p per ordinary share, net of the
final dividend announced in the preliminary results.  At Stirling's Annual
General Meeting on September 11, 2003 it was announced that discussions with
potential providers of debt and equity funding were at an advanced stage.

Further to the announcement on September 11, 2003, the directors of Potter
and the Independent Directors of Stirling announce that agreement has been
reached between the Potter Board and the Independent Directors on the terms
of a recommended cash offer, to be made by PricewaterhouseCoopers on behalf
of Potter, for the entire issued and to be issued share capital of Stirling.

Potter is a recently incorporated company, which has been formed for the
purpose of making the Offer.  Following the Offer becoming or being declared
unconditional in all respects and completion of the Investment Agreement,
the shareholders in Potter will be LDC, a leading U.K. mid-market private
equity investor, the Co-Investment Plan, two of the Executive Directors
(namely Steven Bentwood and Peter Rusby), Solomon Investment (a company
which is wholly owned by Peter Solomon, the other Executive Director) and
the Potter Chairman (who is yet to be appointed).

Details of the recommendation of the Independent Directors are set out in
paragraph 3 of this announcement.

The terms of the Offer

On behalf of Potter, PricewaterhouseCoopers will offer to acquire, on the
terms and subject to the conditions set out or referred to in Appendix I to
this announcement and to be set out or referred to in the Offer Document and
the Form of Acceptance accompanying that document, all of the Stirling
Shares on these basis:

for each Stirling Share                           22p in cash

The Offer values the existing issued share capital of Stirling at
approximately GBP18.7 million and represents a premium of approximately:

(a) 7% to the Closing Middle Market Price of 20.5p per Stirling
Share on September 19, 2003, being the last dealing day prior to this
announcement;


(b) 19% to the Closing Middle Market Price of 18.5p per Stirling
Share on December 3, 2002, being the last dealing day prior to the
announcement by Stirling that the Executive Directors had been granted
permission to explore the possibility of a public to private transaction;
and

(c) 26% to the Closing Middle Market Price of 17.5p per Stirling
Share on June 12, 2003, the last dealing day prior to the announcement on
June 13, 2003 that included a confirmation that the Executive Directors were
investigating an offer of 22p per Stirling Share.

The Stirling Shares to be acquired pursuant to the Offer will be acquired
fully paid and free from all liens, equities, charges, encumbrances, rights
of pre-emption and other third party interests and together with all rights
attaching thereto, including the right to receive and retain all dividends
and other distributions (if any) declared, made or paid on or after the date
of this announcement, save that Stirling Shareholders will be entitled
(whether or not they accept the Offer prior to 1 October 2003) to receive
and retain the final dividend of 1.07p per Stirling Share which will be paid
on October 1, 2003 to
Stirling Shareholders on the register at close of business on September 12,
2003.

If Potter receives acceptances under the Offer in respect of 90% or more of
the Stirling Shares to which the Offer relates, Potter intends to exercise
its rights pursuant to the provisions of Sections 428 to 430F (inclusive) of
the Act to acquire compulsorily the remaining Stirling Shares to which the
Offer relates.

As soon as the Potter Board considers it is appropriate to do so, and
subject to the Offer becoming or being declared unconditional in all
respects and subject to any applicable requirements of the UKLA, Potter
intends to procure that Stirling applies for cancellation, respectively, of
the trading in Stirling Shares on the London Stock Exchange's main market
for listed securities and of the listing of Stirling Shares on the Official
List and also to procure that Stirling is re-registered as a private company
under the relevant provisions of the Act.  A notice period of not less than
20 business days to such cancellation will commence upon the Offer becoming
or being declared unconditional in all respects.  De-listing would
significantly reduce the liquidity and marketability of any Stirling Shares
that are not acquired by Potter.

Recommendation

Taking account of the circumstances set out in paragraph 5 of this
announcement, the Independent Directors, who have been so advised by
Rothschild, consider the terms of the Offer to be fair and reasonable so far
as Stirling Shareholders are concerned.  In providing advice to the
Independent Directors, Rothschild has taken account of the commercial
assessments of the Independent Directors.

Accordingly, the Independent Directors of Stirling unanimously recommend
that all Stirling Shareholders accept the Offer, as they (and their
immediate families) have irrevocably undertaken to do in respect of, in
aggregate, 867,500 Stirling Shares, representing approximately 1.0% of the
existing issued share capital of Stirling.

Undertakings to accept the Offer

Potter has received irrevocable undertakings to accept the Offer in respect
of, in aggregate, 37,875,759 Stirling Shares, representing approximately
44.6% of the existing issued share capital of Stirling.  This total is made
up as:

(a) the Independent Directors (including their immediate families) have
given irrevocable undertakings to accept the Offer in respect of an
aggregate of 867,500 Stirling Shares, representing approximately 1.0% of the
existing issued share capital of Stirling.  These irrevocable undertakings
will
remain binding in the event of a competing offer;

(b) the Executive Directors (including their immediate families) have given
irrevocable undertakings to accept the Offer in respect of an aggregate of
1,486,781 Stirling Shares, representing approximately 1.8% of the existing
issued share capital of Stirling.  These irrevocable undertakings will also
remain binding in the event of a competing offer;

(c) irrevocable undertakings have also been received in relation to the
shareholdings in Stirling of the remaining members of the board of Stirling
(who are neither Independent Directors nor Executive Directors), namely
Peter Dubens and Wendy Leighton, in respect of an aggregate of 848,446
Stirling Shares, representing approximately 1.0% of the existing issued
share capital of Stirling.  These irrevocable undertakings will remain
binding in the event of a competing offer; and

(d) certain institutional Stirling Shareholders (being Second Advance
Realization company Limited, JP Morgan Fleming Asset Management, Framlington
Investment Management Limited and Marlborough U.K. Equity Income Fund) have
given irrevocable undertakings to accept the Offer in respect of an
aggregate of
34,673,032 Stirling Shares, representing approximately 40.8% of the existing
issued share capital of Stirling.  These undertakings will cease to be
binding in the event that a third party announces prior to the first closing
date of the Offer a competing offer on terms which represent a 10% or more
higher value than the consideration payable under the Offer (save for the
undertaking given by Framlington Investment Management Limited , which
ceases to be binding in the event of the announcement prior to that date of
a competing third party offer of higher value).

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: Potter Offered the Best Value for Shareholders
--------------------------------------------------------------
Background to and reasons for the Offer

Prompted by the disappointing performance of the company's share price over
the last three years, the board of Stirling has considered other ways of
creating shareholder value.  That process culminated in granting the
Executive Directors permission to explore a public to private transaction
and in the announcement of the Offer.  Set out below are the factors that
the Independent Directors have considered in their decision to recommend
that Stirling Shareholders accept the Offer.

In recent years Stirling has taken steps to diversify its markets and
customer base by acquiring Tamarind, the overseas sourcing business, and the
Brands Division. The Group, and in particular the Marks & Spencer business,
has undergone significant restructuring during recent years as it has
transferred and outsourced production to manufacturing partners based
overseas.  The Group's future performance continues, however, to rely on its
relationship with its major customer, M&S.  Whilst the Group remains well
placed to benefit from its position as a supplier to M&S, margin pressures
will continue in this division due to continuing fierce competition amongst
high street retailers.  Therefore, unless the Group can generate incremental
growth and further operational savings from the M&S business it may be
difficult to sustain historic levels of profit and cash generation.

The business of Tamarind has also been restructured during the past year.
In order to remain competitive Tamarind continues to transfer operations to
Shanghai, where over 50% of its output is now processed.  Tamarind has
provided the Group with a valuable overseas customer base and an extension
of the product offering to U.K. customers.  Whilst the business is
profitable and cash generative, sales growth has been limited during the
period since Stirling acquired the business.  Severe Acute Respiratory
Syndrome (SARS) continues to affect Tamarind in the current financial year
and demonstrates the impact that such factors can have on Group
profitability.

Despite considerable management effort and investment in marketing, the
achievement of growth expectations and profitability in the Brands Division
is taking longer than anticipated.  Losses have exceeded projections and the
Brands
Division is still not making any contribution to profit in the current
financial year.

In assessing the Offer, the Independent Directors have also made reference
to the historic share price performance of the company.

The Offer represents:

(a) a premium of 19% over the Closing Middle Market Price of 18.5p per
Stirling Share on 3 December 2002, the last dealing day prior to the
announcement that the Executive Directors had been given permission to
explore the possibility of a public to private transaction;

(b) a premium of 26% over the Closing Middle Market Price of 17.5p per
Stirling Share on June 12, 2003, the last dealing day prior to the
announcement on June 13, 2003, which included confirmation that the
Executive Directors were investigating an offer of 22p per Stirling Share,
net of the final dividend announced on June 10, 2003;

(c) a premium of 63% over the Closing Middle Market Price on March 26, 2003
of 13.5p per Stirling Share, being the lowest Closing Middle Market Price in
the six month period prior to 13 June 2003; and

(d) a premium of 33% over the six month average Closing Middle Market Price
prior to June 13, 2003.

Since the announcement on December 4, 2002, the Independent Directors have
not received any alternative proposals or serious expressions of interest
for the whole or any part of Stirling.  Accordingly, the Independent
Directors have concluded that, in the absence of the Offer, Stirling
Shareholders may not be able to realize equivalent value in cash to that
represented by the Offer within a reasonable timescale.  As a result, the
options open to Stirling Shareholders are: to accept the Offer; to remain a
Stirling Shareholder; or to sell their Stirling Shares in the market.
However, if they remain a Stirling Shareholder, there can be no certainty
that the share price will return either to historic levels or to a level
above the Offer in the future.

In making the recommendation in paragraph 3 of this announcement, the
Independent Directors have considered the Offer from Potter against the
factors set out above and note, in particular, the lack of investor interest
in small U.K. textile companies, that no other serious expressions of
interest have been received since the announcement on 4 December 2002 and
that institutional shareholders in Stirling representing 40.8% of the
existing share capital have irrevocably undertaken to accept the Offer.

Information on the Stirling Group

The Stirling Group is an international procurement business, servicing
retail clients around the world.

The core business of Stirling is Bentwood, a business that has been
supplying clothing to M&S for over 50 years.  It is the third largest adult
clothing supplier to M&S and is seen by the Executive Directors as a key
strategic partner of M&S for ladies lingerie.

In August 1999 Stirling completed the acquisition of Tamarind, a Hong Kong
based sourcing company, with an international customer base and a broad
range of products.

In order to further diversify the business away from dependence on M&S and
to move the Group closer to the eventual customer, the Stirling Group
decided to look for brands, which complemented the existing skills in the
Group.  This culminated in December 2001 in the acquisition of the
boardsport brands Headworx and Voodoo Dolls, followed by the acquisition of
the swimwear and nightwear brand OTT in 2002.

The summary on current trading is extracted from the Chairman's
Statement made at the Annual General Meeting of Stirling on September 11,
2003:

"The benefits of the accelerated restructuring of our core business, which
took place last year are becoming evident in the current performance of this
division.  Our brand business, meanwhile, has a number of challenges still
to be addressed and progress remains slower than we had hoped."

Information on Potter, LDC and Lloyds TSB Group

Potter

Potter is a recently incorporated company, which has been established
specifically for the purpose of making the Offer and which, since
incorporation, has not traded or entered into any material obligations other
than in connection with the Offer and the financing thereof. Currently,
Peter Rusby, one of the Executive Directors, holds the one Potter Ordinary
Share, nil paid, which comprises the entire issued share capital of Potter.
Following the Offer becoming or being declared unconditional in all respects
and completion of the Investment Agreement, the holdings of the issued
voting equity share capital of Potter will be: LDC and Co-Investment Plan
(together) 49.00%, each of the Executive Directors (other than Peter
Solomon) 16.15%, Solomon Investment 16.15% and the Potter Chairman 2.55%.
The Potter Board currently comprises the three Executive Directors.  It is
intended that, immediately following the Offer becoming or being declared
unconditional in all respects, Paul Johnson of LDC and the Potter Chairman
will be appointed to the Potter Board.

LDC

LDC is a leading U.K. mid-market private equity investor.  Since its
formation in 1981 LDC has invested in excess of GBP670 million in over 325
companies.  Since January 1, 2001 LDC has invested approximately GBP267
million in 52 new business opportunities through its 6 main offices in the
United Kingdom.  LDC is authorized and regulated by the Financial Services
Authority.

In the year to December 31, 2002 LDC reported total income of GBP41.8
million (2001: GBP72.3 million) and a loss before taxation of GBP14.7
million (2001: profit of GBP39.0 million).  As at December 31, 2002 the
total and net assets of LDC were GBP351.2 million and GBP73.6 million
respectively.

LDC funds its activities through a combination of LDC's own retained
earnings and share capital, and borrowings from Lloyds TSB Group.

LDC is a private limited company incorporated under the laws of England and
Wales.  LDC's registered office is at 45 Old Bond Street, London W1S 4QT.
LDC's ultimate holding company is Lloyds TSB Group plc.

Lloyds TSB Group

The Lloyds TSB Group is one of the leading U.K. based financial services
groups, whose businesses provide a comprehensive range of banking and
financial services in the U.K. and overseas.

In the year to December 31, 2002 Lloyds TSB Group plc reported total
consolidated income of GBP8,878 million (2001: GBP8,889 million) and a
consolidated profit before taxation of GBP2,607 million (2001: GBP3,161
million).  As at December 31, 2002 the consolidated total and net assets of
Lloyds TSB Group plc were GBP252,758 million and GBP7,972 million
respectively.

Stirling Shareholders should note that neither LDC nor any other member of
Lloyds TSB Group has committed to any further equity or debt funding of
Potter beyond that described in this announcement.

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: Potter Offers GBP29.7 Million in Financing
----------------------------------------------------------
Information on financing

Full acceptance of the Offer by Stirling Shareholders will (assuming that
all outstanding options under the Stirling Share Option Schemes which are,
or as a result of the Offer become, exercisable and in respect of which the
exercise price is less than 22p, are exercised and that no other such
options, and no conversion rights under the Stirling Convertible Loan Notes,
are exercised) result in a maximum cash consideration payable by Potter of
approximately GBP18.9 million.  Funds totaling GBP29.7 million have been
raised for the purposes of financing the Offer and expenses in connection
with the Offer, refinancing Stirling's existing debt and redeeming the
Stirling Convertible Loan Notes and have been sourced as:

(i) senior and mezzanine debt financing totaling GBP19 million has been
arranged by Royal Bank of Scotland.  The mezzanine loan facility carries
warrants convertible into Potter C Ordinary Shares which will entitle the
holder to 1.5% of the total proceeds from a winding up, sale or return of
capital of Potter;

(ii) Steven Bentwood, Peter Rusby and Solomon Investment will subscribe
pursuant to the Investment Agreement for an aggregate of 48,450 Potter
Ordinary Shares (at an aggregate subscription price of GBP48,450) and for an
aggregate of 6,640 Potter B Preference Shares (at an aggregate subscription
price of GBP664,000) and it is intended that the Potter Chairman will
subscribe for 2,550 Potter Ordinary Shares (at an aggregate subscription
price of GBP2,550) and for 350 Potter B Preference Shares (at an aggregate
subscription price of GBP35,000); and

(iii) LDC and the Co-Investment Plan will subscribe pursuant to the
Investment Agreement for an aggregate of 49,000 Potter A Ordinary Shares (at
an aggregate subscription price of GBP49,000) and LDC will also subscribe
GBP9,946,000 for the Potter Loan Notes.

In addition, approximately GBP29.5 million of working capital and ancillary
facilities have been arranged to support the future trading of the Stirling
Group.

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: Existing Directors to Enter New Deal with Potter
----------------------------------------------------------------
Arrangements with the Executive Directors

Pursuant to the provisions of the Investment Agreement, following the Offer
becoming or being declared unconditional in all respects, each of the
Executive Directors will enter into a new service agreement with Potter.
These new service contracts will be similar in all material respects to the
current service contracts of the Executive Directors with Stirling, save
that each of Steven Bentwood and Peter Rusby have agreed, subject to the
Offer becoming or being declared unconditional in all respects, to forego
their right to a pension based upon salary at the date of retirement and the
new contract will provide them with a pension based upon their respective
salaries for the year ended March 31, 2002

Further, each Executive Director (other than Peter Solomon) and Solomon
Investment will then hold Potter Ordinary Shares and Potter B Preference
Shares, and will have paid subscription monies therefore, as set out in the
table:

Name               Number of      Total     Number of       Total
              Potter Ordinary  subscription Potter B subscription
                   Shares   price           Preference      price
                            payable         Shares        payable
                             (GBP)                          (GBP)

Steven Michael Bentwood
                   16,150    16,150          2,214        221,400
Peter Grenville Rusby
                   16,150    16,150          2,213        221,300
Solomon Investment
                   16,150    16,150          2,213        221,300


The Potter Ordinary Shares held by the Executive Directors (other than Peter
Solomon) and Solomon Investment will represent 51% of the issued voting
equity share capital of Potter.  The Articles of Association of Potter
contain a ratchet whereby on a flotation, sale or winding-up of Potter the
proceeds attributable to the Potter A Ordinary Shares and the Potter
Ordinary Shares (after deduction of an amount equal to the aggregate
subscription monies paid on all Potter Shares, an amount equal to all
arrears of dividend on any Potter Shares and the pro rata amount
attributable to the Potter C Ordinary Shares) are to be allocated as to 70%
to the holders of the Potter A Ordinary Shares and 30% to the holders of the
Potter Ordinary Shares until the holders of the Potter A Ordinary Shares
have realized a specified level of return (which varies dependent upon the
timing of such flotation, sale or winding-up) on their investment in such
Potter Shares, whereafter 50% of any balance of such proceeds will be
allocated to the holders of the Potter A Ordinary Shares and 50% to the
holders of the Potter Ordinary Shares.

Potter has received irrevocable undertakings to accept the Offer from the
Executive Directors (and their immediate families) in respect of, in
aggregate, 1,486,781 Stirling Shares (representing approximately 1.8% of the
existing issued share capital of Stirling).  In addition, Peter Rusby (one
of the Executive Directors) has given to Potter a non-binding indication
that he intends, once the Offer has become or been declared unconditional in
all respects, to exercise those options held by him under the Stirling Group
plc Share Save Scheme 1995 in respect of which the exercise price is less
than 22p and then to accept the Offer in respect of all the Stirling Shares
acquired upon such exercise.

In order to allow Potter potentially to utilize on the thirteenth day
following the date upon which the Offer becomes or is declared unconditional
in all respects (the Unconditional Date), in satisfaction of the respective
subscription obligations under the Investment Agreement of Steven Bentwood
and Peter Rusby, sums due to them (or their respective spouses) pursuant to
valid and complete acceptances of the Offer lodged not later than the
seventh day following the Unconditional Date, Steven Bentwood, Sharon
Bentwood and Christine Rusby have each authorized Potter, in its discretion,
instead of dispatching such sums to them by check on the fourteenth day
following the Unconditional Date (at the same time as check will be
dispatched to all other accepting
Stirling Shareholders, whose Stirling Shares are in certificated form and
whose valid and complete acceptances are lodged not later than the seventh
day following the Unconditional Date), to apply such sums, to the extent
necessary, for the purpose of fulfilling the subscription obligations of
Steven Bentwood and Peter Rusby.

Rothschild has confirmed it considers the terms of the arrangements between
Potter and the Executive Directors to be fair and reasonable so far as all
other Stirling Shareholders are concerned.

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: Potter Guarantees Employees' Benefits
-----------------------------------------------------
Directors, management and employees of Stirling Group

Potter has given assurances to the Independent Directors that, following the
Offer becoming or being declared unconditional in all respects, the existing
employment rights, including pension rights, of the employees of the
Stirling Group will be fully safeguarded.

Upon the Offer becoming or being declared unconditional in all respects, the
Independent Directors, Wendy Leighton and Peter Dubens intend to resign from
the Board of Stirling.


Stirling Shareholders should note that Peter Dubens was not invited to
become an Independent Director for the purposes of the Offer due to the
possibility that he might have been invited to assist the Executive
Directors in investigating a possible offer for Stirling.  Save for the
irrevocable undertaking referred to in paragraph 4 of this announcement
relating to the Stirling Shares owned by Peter Dubens, no arrangements exist
between Potter and Peter Dubens and he will not have any continuing
involvement with Stirling following the Offer becoming or being declared
unconditional in all respects.

Stirling Shareholders should also note that Wendy Leighton is not an
Independent Director for the purposes of the Offer, due to her continuing
involvement with the Stirling Group after the Offer becomes or is declared
unconditional in all respects, as a consultant to Bentwood Limited, a
subsidiary of Stirling, under the terms of the consultancy agreement already
in operation.

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: To Pay Potter if Takeover Talks End Prematurely
---------------------------------------------------------------
Inducement fee arrangement

Stirling entered into an agreement on September 22, 2003 (with the consent
of the Panel), pursuant to which Stirling has agreed to pay the sum of
GBP185,000 to LDC in the event that:

     (i) prior to the Offer lapsing or being withdrawn, Stirling seeks or
solicits any offer or proposal which leads to any person making, on or prior
to December 2003, an offer for Stirling or any acquisition of all or a
substantial portion of the assets of the Stirling Group; or

    (ii) prior to the Offer becoming or being declared wholly unconditional
or lapsing or being withdrawn the Independent Directors (or either of them)
withdraw their recommendation or modify such recommendation in a manner
which is adverse to the chances of the Offer becoming unconditional as to
acceptances; or

   (iii) prior to the Offer becoming or being declared unconditional as to
acceptances or lapsing or being withdrawn a competing offer for Stirling is
announced which subsequently becomes or is declared wholly unconditional.

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm


STIRLING GROUP: Potter Pledges to Pay Convertible Notes at Par
--------------------------------------------------------------
Stirling Share Option Schemes and Stirling Convertible Loan Notes

The Offer will extend to all Stirling Shares unconditionally allotted or
issued whilst the Offer remains open for acceptance pursuant to the exercise
of options under the Stirling Share Option Schemes, or the exercise of
conversion rights conferred by the Stirling Convertible Loan Notes.

The Stirling Convertible Loan Notes will, in accordance with their terms, be
repaid at par (together with interest to the date of repayment) upon the
Offer becoming or being declared unconditional in all respects.

Potter will, if the Offer becomes or is declared unconditional in all
respects, to the extent that options then remain unexercised, make
appropriate proposals to Option Holders.

General

The conditions of the Offer are set out in Appendix I.

The Offer Document (containing the full terms of the Offer), together with a
Form of Acceptance, will be dispatched as soon as practicable to Stirling
Shareholders and, for information only, to Option Holders and Loan Note
Holders.

This announcement does not constitute an offer or an invitation to purchase
any securities.


Appendix I   Conditions of the Offer

Appendix II   Interests in Stirling and irrevocable undertakings

Appendix III   Responsibility statements

Appendix IV   Definitions

To See Complete Copy of Offer:
http://bankrupt.com/misc/Stirling_Offer.htm

CONTACT:  POTTER
          Steven Bentwood
          Phone: 0161 926 7000

          PRICEWATERHOUSECOOPERS
          (Financial Adviser to Potter)
          Colin Gillespie
          Phone: 0161 245 2000
          Stuart Warriner
          Phone: 0161 245 2000

          STIRLING
          (Independent Director)
          Robert Coe
          Phone: 020 7724 6060

          ROTHSCHILD
          (Financial Adviser to Stirling)
          Richard Bailey
          Phone: 0161 827 3800
          Claudio Veritiero
          Phone: 0161 827 3800

          WEBER SHANDWICK
          (Public Relations Adviser to Stirling)
           Chris Lynch/Josh Royston
           Phone: 020 7067 0720


                            *********


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
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Washington, DC USA.  Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee
Gonzales, Editors.

Copyright 2003.  All rights reserved.  ISSN 1529-2754.

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