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        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, October 2, 2003, Vol. 4, No. 195


                            Headlines


B E L G I U M

FORD MOTOR: Plans to Slash Belgian Workforce by 30%


C Z E C H   R E P U B L I C

CZECH AIRLINES: Welcomes KLM's Addition to SkyTeam


F R A N C E

ADCON TELEMETRY: Court Takes up Bankruptcy Petition
ALSTOM SA: Receives World's Largest LNG Carrier Order


G E R M A N Y

BAYER AG: Expects New Corporate Structure to Spur Growth

* Fitch Predicts Several Bankruptcies in Life Insurance Sector


I R E L A N D

AN POST: Blames Revenue Loss on Firms Sending Mails Via Britain


I T A L Y

IT HOLDING: Assigned 'B+' Long-term Rating; Outlook Stable


N E T H E R L A N D S

KLM ROYAL: Air France Merger Creates Europe's Leading Carrier
KONINKLIJKE AHOLD: To Announce Long-overdue 2002 Results Today


S W I T Z E R L A N D

SWISS INTERNATIONAL: "SWISS in Europe" Concept a Hit
SWISS RE: Escapes Potentially Huge Insurance Claim


U N I T E D   K I N G D O M

BIERRUM HOLDINGS: Receivers Offer Business for Sale
CABLE & WIRELESS: Robert Lerwill Leaves Board
CANARY WHARF: Details Lease Agreement with Barclays
EMI GROUP: S&P Places EUR425 Mln 'BBB-' Notes on CreditWatch
FII GROUP: Auditors Dispute Basis for Going Concern Outlook

FII GROUP: Shares Suspended as Talks on Pension Gap Continue
FOTHERGILL COATED: Administrators Offer Business for Sale
GOSHAWK INSURANCE: Syndicate 102 Downgraded to 'C-'
INVENSYS PLC: Plans to Transfer Operations to U.S.
IQ-LUDORUM: Narrows First-half Operating Loss to US$1.3 Million

POTENTIAL FINANCE: Restructures to Mitigate Industry Crisis
RMC GROUP: HeidelbergCement Interested in German Operations
ROYAL MAIL: Fined GBP7.5 Million for Poor Service
ROYAL MAIL: London Staff Demand Higher Cost-of-living Allowance

* Financial Services Bares Names of Firms in Default


                            *********


=============
B E L G I U M
=============


FORD MOTOR: Plans to Slash Belgian Workforce by 30%
---------------------------------------------------
Carmaker Ford Motor Co. plans to cut 3,000 of its 10,000-strong workforce in
Gent, Belgium as part of a program to reduce staff worldwide.  Ford is
eliminating 1,700 jobs in Germany and 3,050 in North America under a
cost-cutting scheme aimed at stemming losses amid falling sales.  To recall,
Ford said in July it wants to curve spending on salaried employees by 10%
worldwide.

The report cited the company's filing showing that in 2002 its labor costs
for 350,321 employees worldwide was US$23.9 billion, of which salaried
employees accounted for 23 percent.  Since 1999, Ford has cut its U.S.
workforce 6.5 percent to 161,868 employees.

Bloomberg quoted Lewis Booth, president and chief operating officer of Ford
Europe: "We need to reduce our cost structure faster than we anticipated."

The cuts come as the market share of Toyota Motor Corp. and PSA Peugeot
continue increase in Europe.  Ford sales in Western Europe fell almost twice
as much as the market as a whole, forcing the company to incur second
quarter losses of US$525 million.  The job cuts are also part of Chief
Executive William Clay Ford Jr.'s plan to earn 70 cents a share this year.


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


CZECH AIRLINES: Welcomes KLM's Addition to SkyTeam
--------------------------------------------------
Czech Airlines expects to benefit from the takeover of KLM by Air France,
its co-member in the SkyTeam alliance, according to Czech Happenings.

The acquisition will boost the SkyTeam alliance, enabling it to widen its
map of airports, and increase flight connections from Amsterdam.
Spokeswoman Marcela Pickova said Czech Airlines' occupancy should grow, as
KLM clients will be able to use flight connections within the alliance.  The
merger, which will create the world's third largest airline, will also raise
the number of outlets offering tickets of all SkyTeam members, she said.

The SkyTeam alliance houses Air France, Czech Airlines, Delta Air Lines, and
Alitalia.  After the membership of KLM, the alliance will also be opened to
its partners, Northwest Airlines and Continental Airlines.

Czech Airlines' first-half results showed that only the favorable rate of
the U.S. dollar was keeping it alive.  The report says the carrier is
overstaffed and is struggling to shore up productivity and limit losses,
which after 10 years, now amount to more than CZK1 billion.


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


ADCON TELEMETRY: Court Takes up Bankruptcy Petition
---------------------------------------------------
Following Monday's ad hoc release, Adcon Telemetry AG informs that the court
of Grasse, France commenced "Une Procedure simplifiee do Redressement
Judiciaire" for Adcon RF Technology SA on September 24, 2003 under file
number 936/2003.

                              *****

Adcon Telemetry, which is listed in the FWBs Prime Standard segment, filed
for bankruptcy at the commercial court of Korneuburg, Austria on September
15.

CONTACT:  ADCON TELEMETRY AG
          DI Felix Primetzhofer
          Phone: 0043 (0) 2243 38280-0
          E-mail: investor-relations@adcon.at
          Home Page: http://www.adcon.com


ALSTOM SA: Receives World's Largest LNG Carrier Order
-----------------------------------------------------
ALSTOM, via its subsidiary Chantiers de l'Atlantique in Saint-Nazaire
(France) has just received the confirmation of an order from Gaz de France
for a liquefied natural gas (LNG) carrier of 153 500 m3.  Its delivery is
scheduled for the end of 2005.  This order also includes an option for a
sister ship to be delivered at the end of 2006.

This LNG carrier, which will have the largest capacity in the world,
incorporates innovative technologies already developed for the LNG carrier
Gaz de France energy, currently built at Chantiers de l'Atlantique; in
particular diesel-gas electric propulsion system and a new insulation
technology, CS1 type (foam insulation system).

This order demonstrates ALSTOM Marine's expertise in this market, for which
it has already built 15 LNG carriers.  It also underlines ALSTOM Marine's
strategic focus on high added-value vessels, including cruise ships,
ferries, naval vessels and scientific research vessels.

ALSTOM Marine's order book now consists of two LNG carriers (plus one
option) for Gaz de France, one ferry for SeaFrance, one scientific vessel
for Ifremer, two Landing Helicopter Docks (LHD) for the French Navy built in
cooperation with DCN, one 71m+ luxury motor yacht, and two cruise ships, MSC
Opera for MSC and Queen Mary 2 for Cunard (Carnival group).

                              *****

Alstom has been hobbled by cost overruns on key projects, accounting
irregularities at its U.S. operation, and the bankruptcy of a major client.
The company's share price has plunged 90%, and it has shed thousands of jobs
over the past two years.


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


BAYER AG: Expects New Corporate Structure to Spur Growth
--------------------------------------------------------
The Bayer Group has reached another important milestone in its corporate
reorganization.  On September 30, 2003, Bayer HealthCare AG, Bayer Chemicals
AG and Bayer Technology Services GmbH achieved legal independence when the
carve-outs of their respective businesses from Bayer AG were entered in the
commercial register.  Plans call for the operating subgroup Bayer Polymers
and the service companies Bayer Business Services and Bayer Industry
Services to follow suit by the end of 2003.  Bayer CropScience AG already
began operating as a legally independent company on October 1, 2002.

"With this new corporate structure, we are creating the basis for future
success, "commented Werner Wenning, Chairman of the Board of Management of
Bayer AG.  "The new structure promotes these units' individual
responsibility, thereby reinforcing their entrepreneurial approach.  Our aim
is to exploit the potential of our businesses to the full in order to create
value and achieve a sustainable improvement in performance."

Said Rolf Classon, Chairman of the Executive Committee of Bayer HealthCare:
"Bayer HealthCare has a comprehensive range of health products for people
and animals.  One of our strengths lies in our broadly based and competitive
portfolio.  Four of our five divisions are among the top five suppliers in
their respective markets.  This gives us a good starting position from which
to build a strong HealthCare company

With its Pharmaceuticals, Diagnostics, Biological Products, Consumer Care
and Animal Health divisions, Bayer HealthCare comprises all the health care
activities of the Bayer Group worldwide.  The new subgroup also includes the
German affiliates Bayer Vital GmbH and KVP Kieler Pharma + Veterinarprodukte
GmbH, along with numerous foreign subsidiaries.  Bayer HealthCare currently
employs about 34,000 people worldwide and had sales in 2002 of EUR9.4
billion.

"Bayer Chemicals is an innovative and progressive company," explained Dr.
Ulrich Koemm, Chairman of the Board of Management of Bayer Chemicals AG.
"With our high-quality products and our first-class customer service, we are
creating the basis for long-term success."  Bayer Chemicals is a leading
supplier of innovative specialty chemicals, with approximately 14,500
employees at 130 sites around the world.  This new subgroup includes the
existing chemicals businesses of Bayer AG and subsidiary Wolff Walsrode AG.
Bayer Chemicals also has operating responsibility for H.C. Starck GmbH.

The products of Bayer Chemicals are functional building blocks for system
solutions, finishing processes and additives in electronics and optics, food
products, dyestuffs, clothing, leather, textiles, paper, plastics, rubber,
construction materials and advanced ceramics.  Bayer Chemicals also develops
chemical processes for its customers and manufactures intermediates and
active ingredients for pharmaceutical and crop protection products.  The
businesses of Bayer Chemicals had combined sales in 2002 of EUR3.3 billion.

Bayer Technology Services is a globally operating service company for the
development, planning, construction and process optimization of chemical and
pharmaceutical production facilities.  "We aim to help our customers secure
and expand a global competitive advantage through technological innovations
and cost-effective solutions," said Dr. Wolfram Wagner, Managing Director of
Bayer Technology Services GmbH.  "With the establishment of this new
company, the decades of experience and broad expertise of our approximately
2,300 engineers and scientists is now increasingly available to external
customers as well."

This Bayer service company employs around 2,300 experts around the world,
with headquarters in Leverkusen and regional offices in Baytown, Texas;
Antwerp, Belgium; Mexico City, Mexico; Sao Paulo, Brazil; and Shanghai,
China.  Including utilities procurement for all Bayer sites in Germany,
Bayer Technology Services generated revenues in 2002 of EUR690 million.


* Fitch Predicts Several Bankruptcies in Life Insurance Sector
--------------------------------------------------------------
Fitch Ratings warned that the German life insurance industry could face
potential tax charges of EUR10-20 billion under proposed new tax treatments
in Germany.  The agency said it believed some insurers would be unable to
cover this potential new shock from equity and reserves and predicted that
some insurers may need the support of Protektor AG, the insurance industry
rescue fund.

This is just one of the conclusions of a special report on the German life
insurance industry, "German Life Insurers: No End to the Difficult Situation
in Sight - Solvency II Far Away", released by Fitch Tuesday.  The report
paints a gloomy picture for German life insurers, some of which the agency
says are facing the risk of insolvency.

Over the past few months, the trying financial situation of some German life
insurers has become very apparent.  In the first half of 2003, one life
insurer only narrowly avoided insolvency.  The report makes clear that the
danger of future insolvencies for insurers has not passed.  Rather, these
problems have grown, despite the present rally in equity markets and -- with
the introduction Solvency II and the consequences of the tax reform -- the
industry is facing new challenges.

In the report, Fitch analyses -- on the basis of publicly available
information from annual reports -- the level of security and capital
adequacy for 86 German life insurance companies.

Fitch emphasizes that, whilst the assessment of the capital base and capital
adequacy is a significant part of its rating analysis, it is by no means the
only determining factor of the level of an insurer's rating.

Key conclusions of the report indicate: The application of section 341b
Commercial Code (HGB), where temporary devaluations of equity shares and
investment units held by insurers have been included in the annual reports
for 2002, has resulted in the allocation of enormous hidden losses totaling
EUR51.1 billion.  This figure lies above the EUR45 billion-50 billion
estimate that Fitch made in March 2003.  Around EUR16.3 billion of hidden
losses remain on the insurers' balance sheets.  This is offset by reserves
hidden on real estate and fixed-interest securities worth about EUR20.0
billion.  Netting these amounts, life insurers had virtually no significant
reserves as at end-2002 to smooth out future results.

The investment earnings of the industry went slightly into the red,
at -0.1%, based on market values in 2002.  On an average with-profits bonus
of 4.7%, this leaves a negative interest margin of -4.8%.  Fitch believes
that, in spite of the present rally in equity markets, only a few life
insurers will be able to profitably offer capital-accumulating life and
annuity products, because of the burden of high-value guarantees on their
insurance portfolios.

With the proportion of shares in insurers' portfolios averaging just 7% as
at end-June 2003, life insurers gained little from the rallying equity
markets.  At the same time, the reserves hidden in these capital investments
have been weakened by the increase in long-term interest rates.

Fitch continues to believe that a massive equity increase of around
EUR45bn-50bn is necessary in order to restore to an acceptable level the
capitalization of the German life sector.  In addition, the agency expects
there will be further shortages of equity as a result of the planned
introduction of the new, risk-adjusted equity requirements of Solvency II.
Hence, the agency considers German life insurers are still a long way from
being able to apply the Solvency II Regulations.

A copy of the full report is available from the agency's website at
http://www.fitchratings.com


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


AN POST: Blames Revenue Loss on Firms Sending Mails Via Britain
---------------------------------------------------------------
An Post is considering taking legal actions to keep mails originating in
Ireland on Irish grounds and thus prevent loss of potential revenues,
according to BizWorld.

The report said An Post is consulting legal experts on what it can do to
curb the practice by many companies of posting mail via Britain to avail of
cheaper costs.  A number of Irish companies, among them First Active, are
posting mail to Ireland via Britain where rates are cheaper.  The mails are
transferred to Britain electronically, printed, put in envelopes and sent
back to Ireland at lower costs.

Accordingly, this practice allows companies to save between 9c to 12c per
letter for bulk mail.  Bulk mail in Ireland costs 39c a letter.  The report
says First Active was able to save about EUR20,000 when it posted over
200,000 letters from Britain during August.


=========
I T A L Y
=========


IT HOLDING: Assigned 'B+' Long-term Rating; Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its 'B+'
long-term corporate credit rating to Italian fashion company IT Holding SpA.
The outlook is stable.

"The rating reflects IT Holding's leveraged financial profile and limited
financial flexibility," said Standard & Poor's Milan-based credit analyst
Guy Deslondes.

These factors are mitigated, however, by the good recognition of the
company's diverse owned and licensed brand portfolio, as well as by IT
Holding's flexible manufacturing capacity.  In addition, the company has a
sound track record of strict brand control and innovative design, as well as
an efficient supply chain that has enabled it to successfully and rapidly
respond to market trends.  At June 30, 2003, IT Holding's on-balance-sheet
gross debt (excluding about EUR100 million of net securitized receivables)
totaled EUR347 million.

Standard & Poor's expects ITH's second-half 2003 operating performance to be
at least in line with that achieved in the first half, and profitability and
cash flow measures to be markedly higher in 2004.

"ITH is expected to maintain sufficient financial flexibility at all times,
including prudent and early refinancing of debt maturities through 2005,"
added Mr. Deslondes.  "If ITH's operating performance does not improve, or
if liquidity deteriorates, the rating will come under pressure."


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


KLM ROYAL: Air France Merger Creates Europe's Leading Carrier
-------------------------------------------------------------
Air France and KLM expect to conclude an agreement that would lead to the
creation of Europe's leading airline group through a share exchange offer by
Air France for KLM common shares.  The new group will be called Air
France-KLM and will capitalize on two well-known brands, strong hubs and
complementary networks.  This major strategic step is unprecedented in the
European airline industry and is expected to create substantial value for
shareholders.  The Boards of both companies believe that this proposed
combination is in the best interest of customers, shareholders and employees
of both groups and represents a significant opportunity for further growth.

Jean-Cyril Spinetta, Chairman and Chief Executive Officer of Air France,
said: "We have always been convinced of the necessity of consolidation in
the airline industry.  On Tuesday, we announce a combination with KLM that
will create the first European airline group, which is a milestone in our
industry.  This will bring significant benefits to customers, shareholders
and employees.  Capitalizing on the two brands and on the complementary
strengths of both companies, we should, within SkyTeam, be able to capture
enhanced growth opportunities."

Leo van Wijk, President and Chief Executive Officer of KLM, said: "KLM has
been pointing out the need for consolidation in light of the challenges
facing our industry, and we have not made it a secret we were looking for a
strong European partner.

"Through this innovative partnership with Air France and our
Subsequent expected participation in the SkyTeam alliance, we are confident
that we have secured a sustainable future for our company.  Our valuable
Schiphol hub will be an integral part of the dual hub strategy of the new
airline group, allowing us to build on what KLM and its staff have achieved
over nearly 85 years."

The Supervisory Board and Board of Managing Directors of KLM have
unanimously recommended the transaction.  The Air France Board has
authorized Chairman and CEO Jean-Cyril Spinetta to sign the agreement
enabling the implementation of the combination between the two airline
companies.  Air France and KLM expect to sign the transaction agreement
within the next few weeks.

Main Financial Terms of the Proposed Exchange Offer:

Exchange offer 11 Air France shares and 10 Air France warrants for 10 KLM
common shares[1]

Warrants[3]:

Air France warrants give the right to subscribe or to acquire 2
Air France[2] shares at an exercise price of EUR20; maturity of
3.5 years after the closing of the transaction, exercisable after 18 months
Indicative value of the offer EUR16.74 per KLM common share[3]

The envisaged transaction values the common share capital of KLM at
approximately EUR784 million (including the theoretical value of the
warrants) and the exchange offer represents a premium of 40% over the
closing share prices of KLM at September 29, 2003 and 77% based on the
average closing share prices of Air France and KLM shares over the last
three months.

Assuming 100% acceptance of the offer and before exercise of the warrants:

(a) Current KLM common shareholders would own 19% of the enlarged group.

(b) The shareholding of the French State in Air France would mechanically be
diluted from 54% to 44%.

(c) The other Air France shareholders would own 37% of the enlarged group.

Air France will make an offer to all KLM common shareholders, including
those in the U.S.  Shares and warrants of Air France are expected to be
listed on Euronext Paris (primary listing), Euronext Amsterdam and on the
New York Stock Exchange (in the form of American Depository Shares).

One Group - Two Airlines - Three Core Businesses

Combined, Air France and KLM have EUR19.2 billion in aggregate annual
revenues, serve 226 destinations worldwide, operate a fleet of some 540
aircraft and employ approximately 106,000 people (in the fiscal year
2002/03).

In creating one group, while maintaining two operating companies and
building on the strengths of their respective brands, hubs and networks, the
group will continue to focus on three core businesses:

Passengers (77% of aggregate revenues), Cargo (14%) and Maintenance
(4%4).[5]

The proposed transaction will strengthen the SkyTeam alliance, which will
become the second largest alliance worldwide.  In most areas, the group will
also continue to benefit from ongoing cooperation with the respective
partners of both airlines.

Furthermore, in the medium term, the combined group could be reinforced by
the potential integration of Alitalia.

Synergies

Air France and KLM have identified and evaluated a number of areas for
potential synergies.  These are expected to gradually increase and have a
positive impact on the consolidated operating income of at least of
EUR385-495 million as of the fifth year on an annual basis.  Synergy
benefits should be realized through network optimization, improved
deployment of assets (both for the passenger and cargo businesses), better
offerings in maintenance and cost savings in the fields of procurement,
sales and distribution, maintenance and information technology.  Customers
can expect to benefit from these synergies through an extended route network
with increased flight frequencies, attractive pricing and seamless service
throughout the network.

The KLM restructuring plan announced in April 2003 will not be impacted by
the implementation of the above-mentioned synergy plan and KLM management
remains committed to delivering the EUR650 million improvements in operating
income by April 1, 2005.

Structure of the New Group

Following the proposed combination of Air France and KLM and as soon as
legally possible, it is the intention that all Air France assets will be
contributed to a newly created operating company (Air France).

The currently listed Air France Company, renamed Air France-KLM, will then
hold two operating companies: Air France and KLM.

The combination is structured to ensure and protect KLM's international
traffic rights going forward.  Notably, 51% of voting interest in KLM will
be held by two Dutch Foundations and the Dutch State during a transitional
period of three years.  The current option agreement with the Dutch State
will remain in place, subject to certain amendments.

Governance

The Chairman and CEO of Air France will be Chairman and CEO of Air
France-KLM.  The CEO of KLM will be Vice Chairman of the Air France-KLM
Board.

A Strategic Management Committee at Air France-KLM's level will be
responsible for the overall group strategy.

Stakeholders' Assurances

To protect specific interests of KLM and its stakeholders (including,
amongst others, securing traffic rights, fair long-term hub development of
Amsterdam Airport Schiphol and preservation of the KLM brand and KLM's Dutch
identity), Air France will agree to give certain assurances to KLM and the
Dutch State, whilst preserving the interests of the new group and its
shareholders.  Under Dutch law, a separate KLM assurances foundation will be
established, whose Board will have certain powers of oversight concerning
these assurances.

The duration of these assurances has been agreed for the period of five
years with respect to the KLM assurances and has been agreed for the period
of eight years with respect to assurances granted to the Dutch State.

Indicative Timetable

September 30, 2003 Initial public announcement
October 15, 2003 Signing of the final transaction agreement (expected)
Expected

October 2003 Filing with Department of Justice and European Commission

First half of March 2004 (*) Exchange offer to be launched
Second half of March 2004 Extraordinary General Meetings of Air France and
KLM shareholders

First half of April 2004 Closing of the proposed exchange offer
(*) The timeframe between this initial public announcement and the launch of
the exchange offer is primarily driven by regulatory requirements relating
to the listing of Air France-KLM shares in the United States.

The Dutch Authority for the Financial Markets will be duly involved and
will, to the extent required, be requested to grant exemptions, in order to
comply with applicable legal requirements for public offers.

Financial Advisors

Lazard acted as financial advisor to Air France in this transaction.

Each of ABN Amro (lead) and Citigroup acted as financial advisor to KLM in
providing a fairness opinion, stating that the consideration is fair, from a
financial point of view, to the KLM common shareholders.

Table of contents of the appendices
1- Strategic rationale of the transaction
2- Key terms and conditions of the proposed transaction
3- A value-creating transaction
4- Organization and Management
5- Assurances

----------
Footnotes:

[1] Including New York Registry Shares
[2] To be subsequently renamed Air France-KLM
[3] Based on closing share prices as at September 29, 2003 and
    warrant valuation as set out in Appendix 2.
[4] Share in combined revenues only takes into account third
    party turnover
[5] Based on fiscal year 2002/03


APPENDICES

Appendix 1- Strategic Rationale of the Transaction
The airline industry is fragmented and its current competitive structure,
with national carriers for each individual country, is an inheritance from a
former era. This has contributed to low profitability and lack of value
creation for shareholders.  The need for structural changes and
consolidation in Europe is widely accepted, but has not yet commenced as a
consequence of regulatory and political constraints.

The single European market and its current enlargement to some 455 million
inhabitants reinforce the need for consolidation.  The evolution of the
European regulatory framework highlighted by (i) the November 2002 European
Court of Justice ruling and (ii) the mandate given in June 2003 to the
European Commission to negotiate the open sky agreement with the U.S. now
creates an attractive environment for a value creating combination.

If commercial alliances have contributed over the past years to initiate the
first steps towards consolidation, deeper cooperation is now needed to
generate significant and sustainable synergies.

The proposed transaction between Air France and KLM is the first significant
move in this context and will create a leading airline group in Europe with
aggregated revenues of EUR19.2 billion (2002/03 fiscal year).

The combination with KLM is a major step in Air France's strategy.  In
parallel, KLM's strategy over the years has consistently been built on two
pillars: the strengthening of its own organization, as well as the
participation in a global alliance, for which it seeks a strong European
partner.  The combination with Air France is the achievement of this
strategy.

The transaction will benefit from the complementarities of the two airlines
operations:

(a) Two reputable and strong brands that will be further strengthened

(b) Two operational hubs (Paris CDG and Amsterdam Schiphol) which are among
the most efficient in
Europe and provide significant development potential

(c) Two complementary networks both in medium and long haul

(d) In medium haul Air France has a strong position in Southern Europe and
KLM has developed a strong position in Northern and North Eastern Europe,
and both will be able to expand their positions in Central and Eastern
Europe

(e) The long haul networks currently consist of 101 destinations of which
only 31 are common (essentially the world's largest cities with high traffic
volumes)

(f) A combined network of 226 destinations with 93 new destinations for KLM
passengers and 48 new destinations for Air France passengers

(g) A strong presence in cargo where Air France and KLM are the 4th and 11th
largest in the world respectively but with complementary capabilities and
expertise

(h) A strong combination in the field of aircraft maintenance, creating one
of the largest MRO providers world-wide and

(i) SkyTeam will eventually become the second largest global airline
alliance and with its partners being able to offer passengers a more truly
world-wide network Synergies

Potential synergies arising from the proposed transaction have been
thoroughly assessed and quantified by a joint working group of Air France
and KLM who has reviewed the feasibility and quantum of the synergies and
their build-up over time.

Sales and Distribution By coordinating the two sales organizations the new
group will have an improved presence around the world and will be able to
offer a wider range of products to passengers.  Cost savings could be
achieved by coordinating the sales structures of the two companies.  A joint
negotiation position with catering and ground-handling partners could also
lead to additional benefits.

Network / Revenue Management and Fleet

By full code sharing, harmonizing the flight schedules and optimizing common
management revenue policy the two airlines will be able to offer more
destinations, a larger number and more convenient connections for passengers
and to improve sales performance.

Cargo

The offering of an improved product through a more extensive network in
combination with coordinated freighter planning, should lead to an increase
of revenues.  Cost savings should also be possible by more efficient hub
handling.

Engineering & Maintenance

The two airlines will be able to integrate purchasing of stock, to create
centers of excellence in engineering and optimize the use of existing E&M
platforms.

IT

Converging the IT applications used by both airlines should generate
considerable cost savings in the medium term.

Other

Optimizing and harmonizing other activities such as simulator utilization
and joint purchasing of goods should deliver further cost savings.

The identified potential synergies are expected to result in an annual
improvement of the combined operating income (Earnings Before Interest and
Tax) of between EUR385 million and EUR495 million, following a gradual
implementation over a period of five years, with further upward potential
thereafter.

Approximately 60% of potential synergies are expected to be derived from
cost savings.

This does not include additional expected synergies from marketing
cooperation with respective partners.

Furthermore, any improvement from the common fleet policy and lower capex
requirements have not yet been determined and have not been taken into
account in these estimates.

KLM restructuring plan

The KLM restructuring plan, which was announced in April 2003, with targeted
annual operating income improvement of EUR650 million by April 1, 2005, are
additional to the synergies mentioned above.  The KLM management remains
fully committed to achieving this objective.

Appendix 2 - Key Terms and Conditions of the Proposed Transaction

Share Exchange Offer

Air France is expected to offer for 10 KLM common shares:
(a) 11 newly issued Air France shares; for the KLM New York Registry Shares,
the Air France shares
will be in the form of Air France American Depositary shares,

(b) plus 10 Air France warrants.

As part of the transaction, Air France will make an offer to all KLM common
shareholders, including those in the U.S.  Shares and warrants of Air France
are expected to be listed on Euronext Paris (primary listing), Euronext
Amsterdam and on the New York Stock Exchange (in the form of American
Depository Receipts
Shares).

Based on the closing price of Air France shares on September 29, 2003, the
offer values the common share capital of KLM at approximately EUR784 million
(including the theoretical value of the warrants) or each KLM share at
EUR16.74, which represents a premium of 40.0% over KLM's closing share price
of EUR11.96 on the Amsterdam Stock Exchange at September 29, 2003.

Based on the average closing share prices of Air France and KLM, the offer
for common KLM shares represents a premium of 6:

(a) 58.2% over the last month
(b) 77.1% over the last three months
(c) 84.0% over the last six months
Assuming 100% acceptance of the offer and following an issue of 51.5 million
shares by Air France (before exercise of the warrants):

(a) KLM common shareholders would own 19% of the enlarged group.

(b) The shareholding of the French State in Air France would mechanically be
diluted from 54% to 44%.

(c) The other Air France shareholders would own 37% of the enlarged group.

Assuming 100% acceptance of the share exchange offer, 46.8 million Air
France warrants will be issued.  If all the issued warrants are exercised
31.2 million new Air France shares will be issued which will lead to an
increase of the share capital of Air France of EUR624 million.

Premium including Air France warrants valued at EUR1.68 (see main features
of the Air France warrants)

Main Features of the Air France Warrants
The warrants will be offered to KLM shareholders on the these terms:

(a) 10 Air France warrants for 10 KLM Shares
(b) 3 Air France warrants give the right to subscribe or to acquire 2 Air
France7 shares at a price of EUR20 (a premium of 46% over Air France current
share price)

(c) the maturity of the warrant will be 3.5 years post closing of the
transaction

(d) the warrant will be tradable upon closing of the transaction and the
exercise period will start after the 18th month following the closing of the
transaction

Based on the closing share price of Air France on September 29, 2003 of
EUR13.69, a risk free rate of 2.89%, volatility of the Air France share
price of 40%, Air France estimated dividends of EUR0.096, EUR0.144 and
EUR0.188 (I/B/E/S estimates) during the exercise period, the theoretical
value of the warrant is estimated to be EUR1.68 using the "Black & Scholes"
method (dilution effect of the warrants and volatility adjustment taken into
account).

The Air France warrants will be issued in bearer form and are expected to be
listed on Euronext Paris (primary listing), Euronext Amsterdam and on the
New York Stock Exchange upon closing of the transaction Fractional Shares
Air France will not issue any fractional Air France ordinary shares.  With
respect to fractional Air France ordinary shares, KLM common shareholders
will receive their pro rata portion, in cash, of the proceeds from the sale
of the fractional ordinary shares in the market.

Conditions of the offer
Before the share exchange offer will commence the following conditions will
need to be satisfied or waived:

(a) No material adverse change in respect of KLM or Air France

(b) No material breach of the transaction agreement by KLM or Air France

(c) Approval from relevant European Union and US competition authorities

(d) Approval of the exchange ratio and the exchange offer procedure by the
French Commission des Participations et Transferts (CPT) and the French
Minister for the Economy

(e) KLM having duly consulted its trade unions ˇ All agreements with respect
to the transaction having been duly executed and remaining in force

(f) No public announcement indicating that a third party is preparing a
public offer for KLM shares

(g) No public announcement indicating that a third party is preparing or has
made a public offer for Air France shares or has obtained the right or
agreed to acquire a controlling share of Air France, and Air France and KLM
have unsuccessfully negotiated the consequences in good faith to be
subsequently renamed Air France-KLM

After the launch of the offer the acceptance of Air France of the shares
tendered will be made subject to the satisfaction or waiver of the following
conditions, inter alia:

(a) Approval of the transaction by the general meeting of Air France
shareholders

(b) Extraordinary General meeting of KLM's shareholders held

(c) More than 70% of the common shares of KLM (including treasury shares)
being tendered

(d) No material adverse change with respect to KLM

(e) No material new facts come to the attention to Air France which would in
the reasonable opinion of Air France justify withdrawal of the offer but
limited to (1) those that would render a KLM representation or warranty no
longer true and correct or (2) the failure of KLM to comply in a material
respect with the transaction agreementˇ  No governmental authority issuing
an order prohibiting the transaction materially restricting Air France or
KLM or requiring divestiture by Air France of KLM shares

(f) No suspension of trading or limitation of prices (other than due to
price fluctuations) on the NYSE

(g) Authorization for listing of the new shares and warrants on Euronext
Paris, Euronext Amsterdam and the New York Stock Exchange

(h) Filing and effectiveness of the registration statements with the U.S.
SEC and no notification from the Dutch AFM

(i) No public announcement indicating that a third party is preparing a
public offer for KLM Priority and Preference Shares

Upon the successful closing of the exchange offer, the Dutch State has
agreed to sell to Air France its holding of 975 priority shares in KLM.  The
remaining priority shares will be secured before the commencement of the
offer.  The total costs for priority shares is not significant to Air
France.

The Stichting Luchtvaartbelangen Nederland and Rabobank, owners of the 7
million outstanding Cumulative Preference C shares in KLM (representing
11.7% of KLM's voting rights outstanding) have agreed to sell those shares
to Air France conditional to the successful closing of the exchange offer.
The total cost of the Cumulative Preference C Shares for Air France will be
in the range of EUR14 million.

The Dutch State which currently owns 8.8 millions Cumulative Preference
Shares A in KLM (representing 14.7% of total voting rights outstanding),
will decrease its stake in a similar proportion to the French State in Air
France-KLM over time. The total cost of the Cumulative Preference A shares
for Air France will be EUR20 million.

During a 3-year transitional period, Air France-KLM will own 49% of KLM
voting rights.  The remaining 51% KLM voting rights will be shared by two
Dutch Foundations and the Dutch State to allow for the protection of traffic
rights.  The current option agreement with the Dutch State will remain in
place, subject to certain amendments.

Appendix 3 - A value-creating transaction

The significant expected synergies to be realized after combining Air France
and KLM will unlock significant value for the shareholders of both
companies:

For Air France shareholders, the transaction is expected to:

(a) create value through the gradual build-up of the synergies

(b) enhance the earnings growth profile of both operating income and net
income (before goodwill and exceptional items)

(c) be earnings per share accretive as of the first year, based on I/B/E/S
estimates.

(d) improve Air France's market status through increased liquidity, U.S.
listing and reduced French State overhang
(e) For KLM shareholders, the offer represents an immediate premium over KLM
's current share price (40%) and enables them to benefit from the Air
France-KLM earnings improvement due to synergies and the improved
competitive positioning through:

(f) Participating via their 19% stake in Air France

(g) Holding and, in time, executing their valuable Air France warrants

Appendix 4 - Organization and Management

Following the successful completion of the share exchange offer, Air France
will contribute, as soon as legally practical, all its operating assets into
a company airline named 'Air France'.  The currently listed Air France
company, renamed Air France-KLM will hold the two operating companies, each
of which will retain its own identity, brand and operations.  Both airlines
will continue to operate from their respective domestic base.

Board of Directors of Air France-KLM
The Chairman and CEO of Air France will be the Chairman and CEO of Air
France-KLM. The CEO of KLM will be Vice-Chairman of the Air France-KLM
Board.

After completion of the transaction and following the hive down of the Air
France operating assets, the Board of Directors of Air France-KLM will
consist of 16 members:
(a) 3 executive directors (including KLM CEO)
(b) 4 French independent directors
(c) 2 directors proposed by the Supervisory Board of KLM
(d) 3 directors proposed by the French Government
(e) 1 director proposed by the Dutch Government
(f) 1 director proposed by Alitalia
(g) 2 directors proposed by the employees' shareholders

Strategic Management Committee

A Strategic Management Committee (SMC) at Air France-KLM level will be
responsible for the overall group strategy.  The SMC shall render binding
recommendations concerning Air France and KLM with respect to all the major
strategic decisions relating to commercial, financial, technical and
operational matters.

The SMC will consist of four Air France representatives and four KLM
representatives, with its chairman being the Air France-KLM Chairman and
CEO.  The Chairman shall have a deciding vote on all SMC matters except on
these matters:

(a) Amendment of the assurances granted to KLM
(b) Scope of activities of Air France and KLM
(c) Any intra-group agreement other than at arm's length

Corporate governance of the two operating airlines
The managements of Air France and KLM will be in charge of implementing the
binding recommendations rendered by the SMC.
Each operating company remains responsible for its own commercial and
operational management, including human resources, airworthiness and flight
safety, product delivery, flight and ground operations, etc.

KLM Supervisory Board and Management Board
For the transitional period of three years after completion of the
transaction, the Supervisory Board of KLM will consist of nine members, of
which four nominated by Air France-KLM and five by KLM.  After the
transitional period, Air France-KLM will nominate five members out of nine.

The Management Board of KLM will be appointed by the Supervisory Board and
will consist of five members, one of which designated by Air France-KLM.

Air France Executive Committee
One of the KLM representatives will become a member of the executive
committee of Air France.

Appendix 5 - Assurances
To protect specific interests of KLM and its stakeholders for a negotiated
period of time, Air France will agree to grant certain assurances to KLM and
the Dutch State, whilst preserving the interests of the new group and its
shareholders.  A separate KLM assurance foundation has been established
whose board will have general powers of oversight concerning these
assurances.  The duration of these assurances will be five years with
respect to the KLM assurances and eight years with respect to the Dutch
State's assurances.

Assurances given to KLM:

(a) Passenger/ Cargo/ Network/ Hubs: Multi-hub system around Paris-CDG and
Amsterdam Airport Schiphol and fair long-term development of long-haul and
medium-haul services at the 2 hubs

(b) Maintenance: Long-term sharing of "centres of excellence"

(c) Identity and brand: Safeguarding the national identities of Air France
and KLM, logos and brand

(d) Human Resources: Maintain and further develop "centres of excellence";
no discrimination in promotion decisions
Assurances given to Dutch State:

(e) Air-political status: Air France and KLM retain their respective home
bases, operating licenses, Air Transport Certificates and traffic rights

(f) Passenger/ Cargo/ Network/ Hubs: Multi-hub system around Paris-CDG and
Amsterdam Airport Schiphol, and fair long-term development of long-haul and
medium-haul services at the 2 hubs

CONTACT:  KLM ROYAL
          Corporate Communications
          P.O. Box 7700
           1117 ZL Schiphol Airport
           The Netherlands
           Phone: +31 (0) 20 6494545
           Fax: +31 (0) 206488092
           Home Page: http://www.klm.com

           AIR FRANCE
           Corporate Communications
           45, rue de Paris
           95747 Roissy Cedex, France
           Phone: +31 (0) 1 41565600
           Fax: +33(0)1 41568419
           Home Page: http://www.airfrance.com/corporate


KONINKLIJKE AHOLD: To Announce Long-overdue 2002 Results Today
--------------------------------------------------------------
Ahold will issue a press release on its audited consolidated fiscal year
2002 financial statements and restated financial statements for fiscal years
2001 and 2000 on Thursday, October 2, 2003 at 8:00 a.m. CET.  A press
conference will be held at 10:30 a.m. CET on the same day, followed by an
analyst meeting at 2:00 p.m. CET.

Ahold will submit audited consolidated fiscal year 2002 financial statements
to its syndicate of banks after the close of trading hours of both Euronext
Amsterdam and the New York Stock Exchange on Wednesday, October 1, 2003.
Delivery of its audited consolidated fiscal year 2002 financial statements
is a condition under Ahold's EUR2.65 billion credit facility negotiated in
March 2003.  The syndicate of banks has agreed to this deferral of one day
(i.e. from September 30, 2003) of delivery of financial statements in
connection with Ahold's credit facility and the unsecured tranche of US$915
million.

On September 30, 2003, Ahold will pay in full in cash as planned its EUR678
million convertible subordinated notes that mature on that date.

CONTACT:  KONINKLIJKE AHOLD
          P.O. Box 3050 1500 HB
          Zaandam Netherlands
          Corporate Communications
          Phone: +31.75.659.57.20
          Fax: +31 (0)75 659 83 02


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


SWISS INTERNATIONAL: "SWISS in Europe" Concept a Hit
----------------------------------------------------
SWISS customers have responded positively to the "SWISS in Europe" travel
concept since its introduction at the end of August.  Bookings are up by
over 25 percent compared to levels before the launch.  Sales volume
increased in all distribution channels.  As of October 1, passengers in
economy class have the choice to purchase food and beverages on board.

SWISS' new fare and booking system for European travel has been well
received by the market.  In the first four weeks after its launch SWISS in
Europe registered an increase in total bookings of over 25%, with volume
higher for all distribution channels.  Both agency and web channels have
seen very large increases in bookings.

All booking classes are benefiting from strong customer interest.  This
means that the increase in sales in the attractive lower fares has been
accompanied by a rise in sales in higher booking classes as well.

Inflight catering

The implementation of SWISS in Europe includes the introduction of a new
inflight food and beverage concept.  Business class passengers continue to
enjoy our established full-service product, while their counterparts in
economy class now have the choice of purchasing food and beverages on board.
During the introductory phase, the new inflight catering offer was provided
free of charge to passengers in Swiss Economy, who responded
enthusiastically to the range of fresh and satisfying choices on offer.  As
of October 1, passengers traveling in this class will be required to pay for
their inflight food and drinks.  The exception here is children traveling
alone, whose inflight food and drinks are included in the special fee that
applies to this customer category.  Kosher meals are available if ordered in
advance.

On flights shorter than 70 minutes, no meal service is provided in Swiss
Economy, but mineral water is available free of charge.  This policy applies
to flights between Zurich and Frankfurt, Luxembourg, Milan-Malpensa, Munich,
Nuremberg and Stuttgart, as well as domestic services.

As always, more information on the complete SWISS in Europe product is
available at http://www.swiss.com

CONTACT:  SWISS Corporate Communications
          P.O. Box, CH-4002 Basel
          Phone: +41 (0) 848 773 773
          Fax: +41 61 582 35 54
          E-mail: communications@swiss.com
          Home Page: http://www.swiss.com


SWISS RE: Escapes Potentially Huge Insurance Claim
--------------------------------------------------
Swiss Re heaved a huge sigh of relief Monday after a New York Court
dismissed an appeal seeking double indemnity for the terrorist attacks on
the World Trade Center on September 11, 2001.

Larry Silverstein, who holds a 99-year lease on the WTC site, previously
asserted that the terrorism attack be considered as two separate events,
doubling his claim on his US$3.5 billion (CHF4.7 billion) policy.  But the
New York court rejected the appeal and left it to the federal court jury to
decide.  The jury is expected to rule on the case next year, according to
Swissinfo.

The Swiss-based company, which is facing a 22% exposure on the insurance
policies covering the WTC site, is the most exposed of around 20 insurers
facing claims for damages on the destroyed towers.

"It has now been conclusively determined that at least five insurers
[approximately a quarter of those participating on the WTC program]... are
liable for only one policy limit," the company said in a statement.


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


BIERRUM HOLDINGS: Receivers Offer Business for Sale
---------------------------------------------------
The Joint Administrative Receivers, Alison Campbell-Smith and Alistair
grove, offer for sale the business and assets of Bierrum Holdings Limited,
Bierrum Structural Services, and Bierrum and Partners Limited, an
internationally reputed engineering, design, construction and repair
business of complex concreter structures based in Bedfordshire.

Principal features of the business include:  internationally recognized
brand established for c70 years; 5 acre commercial property in Peterborough;
wholly-owned specialist steeplejack subsidiary business (turnover cGBP3
million) -- no in insolvency; specific high value specialist plant and
machinery; intellectual property plus pipelines of tenders.

CONTACT:  PRICEWATERHOUSECOOPERS
          Plumtree Court
          London EC4A 4HT
          Phone: 020 7212 6123
          Fax: 020 7804 5566
          Contact:
          David Bennett
          Nick Britten
          E-mail: David.J.Bennett@uk.pwcglobal.com


CABLE & WIRELESS: Robert Lerwill Leaves Board
---------------------------------------------
Cable & Wireless announces that Robert Lerwill, former CEO Regional, has
left the company with effect from September 30, 2003.

The company announced on June 4 that, following the removal of the Global
and Regional structures, Robert Lerwill had stepped down from the Board and
would provide assistance with the transition and by introducing the new
management team to key Regional contacts.  That process has now been
successfully completed.

Mr. Lerwill, whose contract included a two-year notice period, has agreed to
waive a significant portion of his contractual entitlements.  Accordingly,
he will receive a cash payment of GBP337,500, equivalent to nine months'
salary, in lieu of notice.  He will also receive additional pension credit,
equivalent to eighteen months' pensionable service, the capital value of
which is GBP407,000.

Mr. Lerwill's share-based awards, as shown in Cable & Wireless' 2003 Annual
Report, will vest and become exercisable in line with the rules of the
schemes under which they were granted, including performance conditions
where these apply.

CONTACTS:  CABLE & WIRELESS
           Investor Relations
           Louise Breen
           Phone: 020 7315 4460
           Virginia Porter
           Phone: +1 646 735 4211
           Caroline Stewart
           Phone: 020 7315 6225


CANARY WHARF: Details Lease Agreement with Barclays
---------------------------------------------------
Canary Wharf Group plc has entered into a finance lease transaction in
relation to 1 Churchill Place (BP1), in order to accelerate the refinancing
of the building.

Under the terms of the transaction, when BP1 reaches practical completion
(scheduled for July 2004), the Group will complete the sale of a leasehold
interest (with a term of 999 years less 10 days) in BP1 to a wholly owned
subsidiary of Barclays PLC.  The Group will then immediately accept a
999-year (less 15 days) lease of BP1 with finance lease rents payable over a
35-year period.  The gross amount of such financing is GBP753.5 million in
cash, of which GBP743.5 million was received Tuesday and GBP10 million is
payable upon practical completion.  Following completion and the expiry of
the 5 month rent free period, an occupational lease rent of GBP41 per sq.
ft. will be payable by Barclays Bank PLC in respect of the property which
will secure the finance lease rents.  The finance lease rents will be
calculated by reference to a notional interest rate of LIBOR plus 90 bps on
the notional amount of principal outstanding under the finance lease from
time to time.

After repaying the existing construction loan facility in respect of BP1 and
providing for the future costs of completing construction there, and after
deducting certain other initial costs, expenses and payments associated with
the transaction, the transaction is expected to generate approximately
GBP299 million in additional liquidity for the Group.  This will be used for
general corporate purposes.

The property is presently under construction and was therefore carried at
cost of GBP140 million in the accounts for the year to June 30, 2003.  The
market value of the property in its partially completed state at that date
was GBP240 million.  The transaction will be accounted for as a financing in
accordance with current generally accepted accounting practice.
Accordingly, it is anticipated that the property will, upon completion, be
revalued and reflected in the Group's balance sheet in Investment Properties
at its then market value.

                              *****

As previously disclosed, 1 Churchill Place (BP1) is a 1 million sq. ft.
building currently under construction that has been agreed to be leased to
Barclays Bank PLC subject to an option for Barclays Bank PLC to sub-lease
back to the Group any space in excess of 650,000 sq. ft..

Canary Wharf, which is currently suffering from a slowdown in the real
property market, collapsed 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 after the September 11 attacks
discouraged interest in skyscrapers.


EMI GROUP: S&P Places EUR425 Mln 'BBB-' Notes on CreditWatch
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' senior unsecured debt
rating to the EUR425 million ($496 million) notes, due 2013, issued by
U.K.-based music producer and distributor EMI Group PLC (BBB-/Watch
Neg/A-3), and placed the rating on CreditWatch with negative implications.

"The 10-year notes have been rated subject to Standard & Poor's review of
final documentation, but are expected to rank pari passu with other bank and
bond debt issued by EMI and related entities," said Standard & Poor's credit
analyst Trevor Pritchard.  "We anticipate that the notes will benefit from
upstream guarantees provided by EMI's significant subsidiaries,
mitigating -- but not eliminating -- potential structural subordination."

The notes are to be guaranteed by EMI Group Finance PLC; EMI Group Finance
(Jersey) Ltd.; Capitol Records Inc.; Virgin Records Ltd.; EMI Music
Publishing Ltd.; EMI Records Ltd.; EMI Music International Services Ltd.;
VRL 1 Ltd.; and EMI Group International Holdings Ltd.

Although EMI had gross debt of GBP960 million at March 31, 2003, the group
has refinanced nearly one-half of its debt in recent weeks through the
10-year notes and seven-year convertible bond issues.  In addition, EMI
expects to replace its existing bank facility due March 2005 with a new
facility for the reduced amount of GBP250 million, available until April
2007.

The CreditWatch placement on the ratings on EMI reflects Standard & Poor's
uncertainty over the capital structure of any potential transaction between
EMI and AOL Time Warner Inc. (BBB+/Watch Neg/A-2).  Standard & Poor's will
monitor developments of EMI's discussions with 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.  If any transaction
causes EMI's current consolidated leverage of gross debt to EBITDA to exceed
3x then the ratings on the group could be lowered.


FII GROUP: Auditors Dispute Basis for Going Concern Outlook
-----------------------------------------------------------
Fii Group plc announces its unaudited preliminary results for the year ended
May 31, 2003.

Fundamental Uncertainty - Going concern

Although the financial statements, and therefore the financial information
contained within this Preliminary Announcement are as yet unaudited, the
Auditors have informed us that they intend to modify their audit report to
highlight and refer to the disclosures relating to a fundamental uncertainty
in respect of the going concern basis used in the preparation of the
financial statements.

We have prepared the unaudited financial statements on the going concern
basis, which assumes that the company and its subsidiaries will continue in
operational existence for the foreseeable future.

The validity of this assumption depends on the successful conclusion of both
the directors' efforts to negotiate a compromise agreement with the trustees
of the Fii defined benefit occupational benefit scheme (as outlined in the
Chairman's statement below), which may reduce the ongoing cash cost to the
Group, and the securing of additional funding through an issue of shares in
the company to fund the settlement of the proposed compromise agreement with
the pension trustees.

Whilst we as directors are presently uncertain as to the outcome of the
matters mentioned above, we believe that it is appropriate for the financial
statements accounts to be prepared on the going concern basis.

Chairman's Statement

The year ending May 31, 2003 has marked a significant change of direction
for the Group.  As has already been announced, we withdrew from U.K.
manufacturing, closing our facility in Banbridge, Northern Ireland on March
21, 2003.  Our remaining retail outlet, also in Banbridge, was sold at the
same time.  This final withdrawal from manufacturing meant that I was able
to develop and focus our strategy on Brand Management and Distribution of
our core footwear brands - Lotus, Frank Wright and PerTu.  I have had to
make some difficult and costly decisions to enable me to transform the
business from one steeped in a history of manufacturing into the brand-aware
business we are today.  It is my ongoing strategy to seek new geographical
markets, to maximize the potential of existing brands, to grow other brands
within our portfolio, to expand our brands into other product lines and seek
to acquire previously unprofitable or under-utilized brands for development.

As has been reported, the critical issue facing your Group, of course,
remains the substantial deficit within our final salary pension scheme.  The
final payment to the Pension Fund of GBP475,000 due under the 1999 agreement
was made, as required, in June of this year.  The triennial actuarial
valuation of the fund to May 31, 2002 resulted in a deficit being reported
of some GBP27 million.

The pension fund actuary has served notice on the Group for future
contributions starting in June 2004.  The level of these contributions, if
paid, would render the Group insolvent as disclosed in the circular to
shareholders in February 2003.  However, I can report that we are in
negotiations with the Pension Fund Trustee Board in an attempt to reach a
compromise of the debt (under section 75 of the Pensions Act 1995), which
would fall on the Group in the event of insolvency. This course of action is
strengthened following the 'Bradstock' ruling by the courts in 2002, which
created a precedent for employers and trustees in this situation.

As expected, turnover for the year fell from GBP17.4 million to GBP13.9
million.  This was mainly due to the rundown and closure of the Banbridge
site and the resultant withdrawal from the unprofitable private label
business.

Historically, as a manufacturer, our historic stock levels were not
commensurate with the current profile of the Group. Accordingly, we have
pursued an aggressive policy of clearance of dated stock, with a
consequential adverse impact on margins for this year only.

As part of our rationalization program, our Stafford-based accounts
department is being reduced in size and moved to our head office in
Northampton, reducing costs by an estimated GBP160,000 per annum thus
centralizing our operation into one location.  This coincides with the
implementation of a software solution designed to address the needs of a
modern distribution business.  This will streamline our accounting function,
allow us to communicate more effectively with our customers and suppliers
and provide e-commerce business opportunities.

Provided that we can agree and bring into effect a compromise with the
Pension Fund, I believe that the Group is well positioned to deliver value
to shareholders.  I firmly believe that under the focused and motivated
management now in place, your company has a bright future.  I hope to make a
further announcement regarding the pension fund settlement in due course.

Douglas Ware
Chairman and CEO

26th September 2003


OPERATING AND FINANCIAL REVIEW

Sales

Lotus maintained its volume with sales of GBP10.9 million compared with
GBP11.1 million last year.  The cost base of Frank Wright was addressed and
the range rationalized.  This necessary reorganization caused an expected
drop in sales from GBP2.5 million to GBP1.9 million but returned the brand
to a profit of GBP0.138 million after a loss of GBP0.105 million the
previous year.

Private label sales fell from GBP3.8 million to GBP1.1 million.  As had been
reported, Private Label business had become increasingly unprofitable.
Falling volumes combined with costly UK manufacture necessitated complete
withdrawal from this sector.  By the end of the year under review, that
process was complete.

Margins

The overall Group gross profit margin was down to 16% from 23.2% last year.

This fall is the result mainly of our private label business producing a
negative margin of 17.7% compared to a 4.4% positive margin last year.  This
confirms the rationale behind our withdrawal from the private label
manufacturing business and the consequent closure of the Banbridge facility.

The overall gross profit margin excluding private label business, would have
been 21.4%.  This compares favorably with last year bearing in mind the
sustained strength of the Euro; this reduced our gross margin across Lotus
and Frank Wright by GBP0.436 million against a foreign exchange gain the
previous year.  Without the Euro and private label effects the overall
margin would have been 24.8%.  Whilst we have always hedged against currency
exposure using the various financial instruments available to us, we are
also now expanding sales into Europe generating Euro income that will help
offset this exposure in future.

The closure of Banbridge allowed a reduction in overall stock levels and
more efficient utilization of our centralized warehouse at Northampton.
However, this exercise cost a further GBP0.148 million in stock writedowns.
If all three factors are removed, the overall gross profit would have been
26%.

Operating Expenses

Operating expenses in 2000/2001 including exceptional items on continuing
and discontinued operations were GBP6.931 million.  In 2001/2002 when I had
executive responsibility for the full year, these operating expenses fell by
some GBP2.323million to GBP4.608 million.

In the year under review, operating expenses fell a further GBP0.251million
to GBP4.357 million.  I am confident that further significant savings will
be apparent at the interim stage and more so at the year-end in 2004.  These
savings have been achieved despite increases in pension fund legal and
professional fees of GBP0.096 million.

Non-operating Exceptional Items

After the profits on the disposal of the Banbridge site and its associated
plant and machinery are offset against the costs of closure, there was a
loss of GBP0.725 million.

Pension fund costs

The additional pension fund costs totaled GBP0.695 million during the year,
being the additional annual contribution of GBP0.475million, together with
GBP0.220 million in respect of legal and other professional fees paid on
behalf of the scheme.

Balance sheet and cash flow

As was to be expected with the disposal of our freehold site in Banbridge,
fixed assets have reduced by GBP0.995 million. Current assets reduced from
GBP5.666 million to GBP4.401 million largely due to the planned reduction in
stock levels.
Net cash outflow for the year on operating activities was GBP2.9 million.
This was mainly attributable to exceptional items of GBP2.211 million.

The future

Managing our way out of manufacturing in Banbridge was always going to be a
difficult, costly and thankless task.  I would like to extend my personal
thanks to the workforce in Northern Ireland for the mature and professional
way in which this painful exercise was handled.

Expected improvements in the margin on product previously sourced from
Banbridge will benefit Lotus in the year ending in 2004.  Along with the
reduced layers of management that I have implemented we can now move forward
into 2004 on a vastly reduced cost base from which the business can be
grown.

We have now obtained firm orders for new business in Canada, the USA and
Bermuda.  A license agreement has been entered into with a Spanish
manufacturer and we are also now dealing directly with Spain's leading
department store chain.  After a successful ten store trial, we now have a
major new multiple outlet client in the U.K. with over 100 sites.  We will
have a presence in all of these stores starting in Spring/Summer 2004.

We will continue to nurture our mainstream Lotus business in the U.K. and
Eire while further developing our other brands, Lotus of England, Frank
Wright, PerTu and Thomas Bostock both in the U.K. and in specific markets
overseas.

Douglas Ware
Chairman and CEO

26th September 2003

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

CONTACT:  FII GROUP
          Douglas Ware, Chairman and CEO
          Phone: 01604 593600

          BEAUMONT CORNISH LIMITED
          Roland Cornish, Chairman
          Phone: 0207 628 3396


FII GROUP: Shares Suspended as Talks on Pension Gap Continue
------------------------------------------------------------
As referred to in the preliminary announcement of results issued on
September 26, 2003, the company is in negotiations with the Pension Fund
Trustees in order to reach a compromise of the debt which would fall on the
Group (under section 75 of the Pension Act, 1995) in the event of insolvency
and which would otherwise arise were the company to pay the required level
of future pension contributions.

The Board remains hopeful that these negotiations will be concluded
successfully and that the necessary fund raising will be achieved.  However,
given the current uncertainty as to the outcome, the Board has requested an
immediate suspension in trading in the company's shares.

CONTACT:  FII GROUP PLC
          Douglas Ware, Chairman
          Phone: 01604 593 600

          BEAUMONT CORNISH LIMITED
          Roland Cornish
          Phone: 020 7628 3396


FOTHERGILL COATED: Administrators Offer Business for Sale
---------------------------------------------------------
The Joint Administrators C P Holder and M J Moore offer for sale the
business and assets of Fothergill Coated Fabrics Limited.

Features: a manufacturer and distributor of specialist coated fabrics to a
worldwide customer base; annual turnover of approximately GBP1.6 million;
freehold property approximate size 3,300 sq. m. (36,000 sq. ft.) located in
Smallbridge, Rochdale; 2 coating towers used for fluoropolymer coated
performance fabrics of size 1 m and 4 m respectively; gas-fired adhesive
curing over, Farmer Norton 3 m calendar, various quality control and cutting
machines; skilled workforce.

All interested parties need to be in contact by Tuesday, October 7, 2003.

CONTACT:  Alison Gill, Kroll Limited
          5th Floor, Airedale House
          77 Albion St. Leeds LSI 5AP
          Phone: 0113 386 0800
          Fax: 0113 244 9305
          E-mail: agill@krollworldwide.co.uk


GOSHAWK INSURANCE: Syndicate 102 Downgraded to 'C-'
---------------------------------------------------
Moody's Investors Service downgraded the performance rating of syndicate
102 -- Goshawk Syndicate Management Limited -- to 'C-' Below Average from
'C+' Below Average.  The rating is under review for possible downgrade.

Goshawk Syndicate 102 is a predominantly short-tail, composite syndicate
that is 100% backed by the listed Goshawk Insurance Holdings plc that
operates within the Lloyds of London insurance market.  Syndicate 102
accounted for GBP45 million of the Goshawk Insurance Holding's GBP31 million
for the six months to June 30, 2003, on an annually accounted basis.

The rating agency said: "The current losses for 2000 to 2002, adjusted for
the mid-point actuaries' estimates and assuming a 45% loss for 2001, suggest
that the corporate member is at present insolvent if continuous solvency is
applied."

If Lloyd's put the syndicate into run-off, it would incur additional run-off
and reinsurance costs of over GBP50 million, Moody's said.  Lloyd's could
also transfer funds from Goshawk Re to support the syndicate operation but
the move is most likely to adversely affect the business of Goshawk Re.
Moody's said the only chance it would re-evaluate the syndicate's
performance rating is when Goshawk refinance its syndicate operation through
an agreement with Lloyd's; but the possibility is limited.


INVENSYS PLC: Plans to Transfer Operations to U.S.
--------------------------------------------------
Invensys could announce plans to relocate its headquarters to Boston,
Massachusetts soon, insiders said told The Times.

The plan, which still needs approval from the board, could be executed
within 12 to 18 months' time, affording the company time to restructure
finances and dispose of businesses worth GBP1.8 billion.  The troubled
automation and controls group has put two thirds of its business up for sale
to plug a GBP900 million- pension deficit and take care of GBP1.6 billion in
debts due to be refinanced in 2005.

The move could force Chief Executive Rich Haythornthwaite to resign.  He is
recalled to have said he is not sold out to the idea of transferring to the
U.S.  His employment contract, which was revised in May, allows him one
month's notice in May.  A significant number of staff at the company's
headquarters in London's Victoria is already resigning, according to
insiders.  They are leaving at a rate of five to 20 a month.


IQ-LUDORUM: Narrows First-half Operating Loss to US$1.3 Million
---------------------------------------------------------------
I am pleased to present the interim report of IQ-Ludorum plc for the six
months ended June 30, 2003.  The six months to June 30, has been a
challenging one for IQ-Ludorum.  The company has continued the restructuring
program that was started last year.  Great care has been given to this
process to ensure that IQ-Ludorum does not compromise its service to our
customers, whilst undertaking cost changes that ensure our future in the
industry.

Revenues for the six months amounted to $2,077,000 (2002 - $2,860,000).  The
operating loss was $1,292,000 (2002 - $4,931,000).  The loss on ordinary
activities after taxation amounted to $1,719,000 (2002 - $4,900,000) or
$0.02 per share (2002 - $0.06 per share).  Cash and short-term investments
at 30 June 2003 amounted to $244,000.

Management has continued a focused program to ensure the Group is able to
operate within its available cash reserves.  Last year all cost areas were
critically reviewed to produce a leaner organization but one still able to
service its clients and produce quality software.  This process is now
largely completed and in fact the company is now actively recruiting in
areas where additional resources are required.

The charge for exceptional items before operating profit totals $84,000
(2002 - $800,000). In addition, a loss of $427,000 on the sale of fixed
assets has been treated as a non-operating exceptional item (2002 - $nil).
Of the total exceptional items, $360,000 relates to the restructuring of the
Costa Rican operation and the balance is associated with fixed asset write
downs concerning the disposal of the Indian and U.K. consulting divisions.

Future Prospects

IQL continues to actively market and sell its sportsbook, racing and casino
products as well as pursue new opportunities with its EPOS and Kiosk
wagering products.  We are pleased with the market acceptance of our current
range of products and look forward to enjoying revenue from our new
initiatives.  These have taken longer to transpire than previously predicted
but are still expected to contribute significantly to the revenue line
before the end of this year.  Our Brazilian kiosk partner now has signed
their first contract for kiosks and is engaged in a series of negotiations
with other parties for both casino and sports-wagering opportunities.

I want to thank our staff for their continued hard work and their ability to
adapt to very fluid business conditions.

Roger Stone
Chief Executive Officer

29 September 2003

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


POTENTIAL FINANCE: Restructures to Mitigate Industry Crisis
-----------------------------------------------------------
Against a background of difficult trading conditions, common to many
companies within the sector, the Group has acquired suitable new clients at
levels below the expectations of the Board.  Although the Group's operating
performance has been reasonable, the Directors consider that progress during
the next year will prove increasingly difficult with the Group's current
level of overhead.

Accordingly, the Board has decided to implement a strategy designed to
establish a more appropriate operational structure.  This strategy
encompasses a restructuring of the Group's sales and operations department,
with the loss of six employees who are being made redundant.  Hugh Craen,
Managing Director and
Laurence Rutter, Chief Executive, who both have a background in sales, will
assume direct responsibility for the Group's sales operation.

The Board has also undertaken a detailed review of the portfolio of clients
and concluded that it would be appropriate to provide against possible bad
debts, over and above the Group's present bad debt reserve.  This reserve,
which has been built up since the business commenced trading in 1999, will
be retained at its existing level as a matter of prudence.

The costs of the restructuring and the additional provision against possible
bad debts will, in aggregate, amount to approximately GBP0.7 million.  As a
consequence, the Directors anticipate that the Group will report a loss
before tax for the year ended September 30, 2003 in the order of GBP0.5
million.  After incorporating a professionally assessed increase in the
value of freehold property, the Group will continue to have net assets of
approximately GBP5 million, equating to over 47 pence per share.

New products and services are always being considered, and in August the
first of these were implemented, in the form of Potential Asset Finance
Limited.

This division is headed by Colin Swanston, as Managing Director, who brings
20 years' experience in asset finance to the Group and has already made
excellent progress.  Potential Asset Finance Limited will benefit from the
systems and staff already in place within the Group, so will look to grow
without incurring many of the usual start-up costs necessary.  The Board
believes that there is a buoyant future in servicing niche areas for leasing
and hire purchase and feels that with the factoring facilities offered by
Potential Finance Limited, opportunities will emerge for 'one stop' finance
for SME's.

In summary, the Board considers that the actions being taken are essential
in order to establish a more appropriate structure for the Group's
activities within the current economic climate, and will leave the Group
well placed for the new financial year and for future expansion,
particularly once trading conditions in the core operation of factoring
improve.

CONTACT:  POTENTIAL FINANCE
          Laurence Rutter
          Phone: 01277 237162
          Vivien Ware
          Phone: 01277 237171

          Charles Stanley
          Philip Davies
          Phone: 020 7953 2000


RMC GROUP: HeidelbergCement Interested in German Operations
-----------------------------------------------------------
German cement maker, HeidelbergCement, has approached RMC Group with an
offer for its loss-making German operations.  The British company clarified,
however, that the bid is "at an exploratory stage," which means it is still
uncertain that a sale could materialize.

Reuters, citing German newspaper Die Welt, said Heidelberg is expected to
make an offer running into the triple-digit millions of euros for the unit
within four weeks.  Analysts estimated the German business to be worth
around a billion a year ago.

"I can confirm we are in exploratory talks with RMC over Readymix AG," a
spokesman for Heidelberg said on Wednesday, according to the report.  "The
talks are at an early stage," he added.

The German business recorded a loss of GBP31.4 million on GBP351 million of
turnover in the six months ended June 30, as the construction sector
continued to show inactivity.  A price war in the concrete and cement
sectors also contributed to the company's woes.

Readymix AG is considered the world's largest maker of ready-mixed concrete.


ROYAL MAIL: Fined GBP7.5 Million for Poor Service
-------------------------------------------------
Postcomm gave Royal Mail 28 days notice that it intends to impose a penalty
of GBP7.5 million for failure to meet standards on two postal products.

The penalty relates to Royal Mail's services used by business customers:
First Class Post Paid Impression (PPI) and First Class Response Services.
Postcomm imposed an enforcement order on Royal Mail last December in
relation to these products.  The order required Royal Mail to take certain
basic steps to ensure that service quality improved.  In spite of this,
Postcomm found that Royal Mail failed to do enough to ensure these services
met their targets.  The company's performance was around 6% below the agreed
licensed targets for the year for both products.

The amount of the penalty takes account of the fact that there is as yet no
mechanism by which Royal Mail can be made to pay compensation direct to the
customers affected.  Postcomm intends to finalize a compensation scheme very
shortly.

Postcomm Chairman Graham Corbett said: "Most businesses lose customers and
lose money when they provide poor service.  I hope that this penalty will
drive home to people at all levels in Royal Mail the message that customer
service matters."

Royal Mail and others have 28 days to make representations to
Postcomm in relation to the proposed penalty.

                              *****

Royal Mail's First Class PPI and First Class Response Services were subject
to an enforcement order for three months up to 31 March 2003.

The target for both services is delivery of 92.5% of post the next day.  For
February and March 2003 (the period for which the target was measured),
First Class PPI recorded 86.3% and First Class Response Services 86.8%.

Under Royal Mail's license, the company commits a breach if it fails to meet
a service quality target and can be shown not to have used all reasonable
endeavors to try to meet it.  That was Postcomm's finding in relation to
these two products for 2002/3.

The Commission believes that Royal Mail had not followed its own audit
processes in checking service quality and had not made all reasonable
endeavors to meet the service standards consistently across the country.

If confirmed, the penalty will be payable in one installment, 49 days after
the imposition of the penalty.  Postcomm is developing a compensation scheme
for late mail to provide customers with redress against Royal Mail if it
provides poor service in the future.

CONTACT:  POSTCOMM
          Chris Webb
          Phone: 020 7593 2114
          Mobile: 07779 635881
          E-mail: chris.webb@psc.gov.uk

          Joseph Bonner
          Phone: 020 7593 2116
          Mobile: 07773 329902
          E-mail: joseph.bonner@psc.gov.uk

          Jonathan Rooper
          Phone: 020 7766 1210
          Pager: 07693 352732
          E-mail: jonathan.rooper@cardewchancery.com


ROYAL MAIL: London Staff Demand Higher Cost-of-living Allowance
---------------------------------------------------------------
Workers of Royal Mail Group Plc held a 24-hour strike on Wednesday to demand
that the Chesterfield, England-based courier increase their London
cost-of-living allowance.  Prior to this, the union's Deputy General
Secretary Dave Ward warned in a statement that 30,000 members of the
Communication Workers are poised to hold the walkout.

The workers are urging the management to add GBP4,000 a year to their
allowance for housing, childcare and transport.  They are currently
receiving an extra GBP3,281 (US$5,430) a year for living in inner London and
GBP2,038 a year for living in outer London.

Earlier, they also demanded that Royal Mail scrap the conditions attached to
an offer of a 14.5% pay rise over 18 months, threatening to hold a first
national strike in years.  But on ballot, members of the union, which
represents about 90% of Royal Mail's workforce, voted against it.  The
demands came as the U.K. postal service enters the first year of its
three-year plan to trim down costs by GBP1.4 billion a year to turn in a
profit.  As part of the drive, Royal Mail axed 15,000 jobs, with a view to
cutting 15,000 more.


* Financial Services Bares Names of Firms in Default
----------------------------------------------------
The Financial Services Compensation Scheme is encouraging consumers who may
have lost money as a result of their dealings with any one of 19 firms
recently declared in default by the Scheme, to claim compensation.

Declaring a firm in default opens the way for anyone who has lost money, as
a result of dealings with such a firm, to make a claim for compensation to
The Financial Services Compensation Scheme.  The limit for investment
compensation is GBP48,000. Consumers who believe they may have a claim,
should contact the Scheme on +44 (0)20 7892 7300.

The declaration of default is the final part of a process whereby a
regulated firm (for example, an independent financial adviser) is deemed
unable to pay claims for compensation against it.  This is usually because
it has insufficient assets, for example, because it has ceased trading or is
insolvent.

The Financial Services Compensation Scheme is the single compensation scheme
covering investments, deposits and insurance. It provides a safety net for
consumers who have claims against regulated firms that are unable to pay
them.

A list of the 19 investment firms is attached, and a list containing the
full address of each of the firms is available from The Financial Services
Compensation Scheme's website at http://www.fscs.org.uk/

Consumers can also use the default database on the website to check to see
if a firm they have dealt with previously has already been declared in
default.

The Financial Services Compensation Scheme became the single compensation
scheme in the financial services sector on December 1 2001, when the
Financial Services and Markets Act came into force.  All previous
compensation schemes, including the Investors Compensation Scheme, ceased to
operate at this time.

Default Declarations by FSCS

East
Alexander Stronghold Financial Services Limited, previously Stronghold
Financial Services Limited, Leigh-on-Sea
John Hayman PLC, Maidenhead
John Williams trading as D C Parker Life & Pensions, Hertford
Stephen Cowan trading as Cowan Elliott, Reading

Midlands
Heanor Insurance Services Limited, Heanor
Stone House Life Assurance Services Limited, Allcester

North
Jackson & Jackson, York
James Moffat Spence trading as Watson Laurie Sinclair Life & Pensions
Consultants, Bolton
McClure & Whitaker (Life) Limited, Cumbria

Scotland
E K Financial Services Ltd, East Kilbride
Financial & Broking Services Limited, Largs
John MacKenzie formerly trading as Chanonry Assurance Service, Avoch
Spalding Kirkcaldy Limited, formerly Spalding (Insurance Brokers) Limited,
Kirkcaldy

South
BLW Developments Limited (in liquidation), formerly Wells Mortgage &
Insurance Brokers Limited, Somerset
Hayman Jackson (Insurance Brokers) Limited, Petersfield
H O Cheeseman and Associates Limited (in liquidation), Croydon
S & G L Financial Consultants, 482 Maidstone Road, Bluebell Hill, Chatham,
Kent ME5 9QL

Wales
Arthur G Davis & Co (Financial Services) Limited, Rhyl
Davies Dickens & Slocombe Financial & Insurance Services Limited, Cardiff


                            *********


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
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Information contained herein is obtained from sources believed to be
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