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/raid1/www/Hosts/bankrupt/TCREUR_Public/031016.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, October 16, 2003, Vol. 4, No. 205 Headlines C Z E C H R E P U B L I C LETECKE ZAVODY: Management Vows to Fight Bankruptcy Petition VITKOVICE HOLDING: Sets Oct. 29 EGM to Formalize Lahvarna Merger F R A N C E ALSTOM SA: Bags EUR190 Mln Supply, Maintenance Contract in Spain SCOR: Prepares EUR370 Mln Cash Boost for Troubled Insurance Arm VIVENDI UNIVERSAL: Simplifies Vodafone Partnership in France G E R M A N Y DEUTSCHE TELEKOM: Revives Offer to Sell Stake in Globe Telecom ENERGIE BADEN-WUERTTEMBERG: Divests East German Units I T A L Y FIAT SPA: Expects New Models to Increase German Sales Next Year N E T H E R L A N D S GETRONICS N.V.: Reports Positive Pre-tax Q3 Earnings KONINKLIJKE AHOLD: Lawrence Benjamin Named U.S. Foodservice CEO ROYAL KPN: Redeems Bond Ahead of 2005, 2006 Maturity ROYAL PHILIPS: Reports EUR124 Million Third Quarter Net Profit S W I T Z E R L A N D ABB LIMITED: Postpones Sale of Swiss Buildings Companies ASCOM: French Unit's Restructuring to Take Effect this Month CLARIANT AG: UBS Agrees Asset Disposal Is on Track U N I T E D K I N G D O M AMP LIMITED: Moody's Affirms Short-, Long-term Ratings BAE SYSTEMS: To Axe Hundreds of Jobs in Plymouth Factory BAE SYSTEMS: Expects Windfall from Middle East Defense Spending CLUB FEVER: Joint Administrators Seek Rescuers for Nightclub EMI GROUP: Former Chief Seeks Backing for Possible Offer EQUITABLE LIFE: Crucial Ruling on Negligence Case Due this Week INVENSYS PLC: Operating Profits at Lower End of Expectations LAMCO TECHNICAL: Joint Administrators Seek Buyers MORGAN CRUCIBLE: Shares Rise as Takeover Rumors Circulate NORTHERN CLINIC: Joint Receivers Sell Private Hospital SAFEWAY PLC: J Sainsbury Eyes Half of 'For Sale' Stores SKERMAN LIMITED: Appoints RSM Robson as Joint Administrators VISUAL GOLD: Administrators Offer Business, Assets for Sale WALT DISNEY: To Hold Conference Call November 20 ********* =========================== C Z E C H R E P U B L I C =========================== LETECKE ZAVODY: Management Vows to Fight Bankruptcy Petition ------------------------------------------------------------ The Czech Social Security Authority is not going to withdraw its bankruptcy petition against Letecke zavody Kunovice, despite warnings it could lead to the closure of the country's largest civil aircraft manufacturer, Czech Happenings said. The agency, which is owed CZK50 million by Letecke, filed the petition at the Regional Court in Brno last week over objections from the company that it does not meet the criteria for bankruptcy. The management warns bankruptcy could put an end to aircraft production and block dozens of multi-million-dollar order for aircraft supplies from Singapore Airlines. The Asian side of the carrier suspended a possible transaction until all matters are resolved, said Letecke Board Chairman Libor Soska. Czech Social Security Authority spokeswoman Stepanka Mikesova said the agency is aware of the consequences but would nonetheless continue with the petition. "The Czech Social Security Authority is willing to continue negotiating with the company but on condition that it pays regular insurance installments in time and to the full," she said. According to the Brno court, nobody else filed a petition; but the largest Czech health insurance company VZP, which is owed CZK16 million, said it would do so in the event bankruptcy is declared, according to the report. "The Czech Social Security Authority registers much higher claims on some other companies, and if it decided to file a bankruptcy petition against our company, it should proceed in the same way also against these debtors," Mr. Soska said. "It is a breach of equal conditions [of economic competition] and we are ready to defend ourselves with the Constitutional Court, in Strasbourg or through an arbitration," he added. Letecke zavody Kunovice was created in August 2001 out of bankrupt LET Kunovice. Sole shareholder Moravan-Aeroplanes bought the troubled firm for more than CZK200 million. VITKOVICE HOLDING: Sets Oct. 29 EGM to Formalize Lahvarna Merger ---------------------------------------------------------------- Vitkovice's new owner, Lahvarna Ostrava, will officially take over all shareholder rights at the steelmaker at an extraordinary general meeting on October 29, according to Czech Happenings. The merger of Lahvarna Ostrava and Vitkovice was approved by the anti-monopoly office last week, according to the agency's Kristian Chalupa. Lahvarna bought the state-owned stake from the National Property Fund and its subsidiary PAL for CZK402 million in late August. It also received a claim of CZK2.768 billion from Czech Consolidation Agency. Lahvarna Ostrava co-owner Jan Svetlik became general manager as well as chairman of the board following the takeover. Petr Novotny, Milan Jurik and Jaromir Siler were made 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: Bags EUR190 Mln Supply, Maintenance Contract in Spain ---------------------------------------------------------------- Renfe, the Spanish national railway company, has awarded Alstom a contract worth EUR190 million to supply and maintain 40 electric commuter trains. The contract is for 20 four-car trainsets and 20 three-car trainsets, a total of 140 cars. Alstom will build the cars according to the specifications of Renfe's platform for its new generation of modular commuter trains, called Civia. The trains, based on the latest railway technology, will offer high levels of performance and safety. More specifically, its features will be: (a) The traction system is from ALSTOM's service-proven line of ONIX drives, which offer reduced volumes and lighter weight. (b) Computer-based onboard control systems send train information via digital transmission to the command center and to the depot workshop. Onboard computers will also make self-diagnostic applications possible, which helps reduce maintenance costs. (c) With an aluminum-alloy body shell, the lightweight trains offer energy-cost savings. (d) Thanks to the modularity of the vehicles, the articulated trainsets may be configured with different combinations, depending on service needs. (e) A low-floor entrance will offer passengers, including those with reduced mobility, easy access. A continuous gangway throughout the train further enhances passenger comfort. Alstom's Barcelona factory will manufacture the body shells, assemble and test the trains. The bogies will be supplied by Alstom's factory in Valencia, Spain, with Charleroi in Belgium manufacturing electrical equipment and Saint-Ouen in France supplying the train-control systems. CONTACT: ALSTOM SA Investor relations E. Chatelain Phone: +33 1 47 55 25 33 E-mail: Investor.relations@chq.alstom.com SCOR: Prepares EUR370 Mln Cash Boost for Troubled Insurance Arm --------------------------------------------------------------- France's SCOR S.A., whose ratings have been downgraded by A.M. Best following a deterioration in the reinsurer's risk-adjusted capitalization, is reportedly set to inject a substantial amount into its life reinsurance unit SCOR Vie. Intesatrade, citing French newspaper Le Figaro, said SCOR intends to inject EUR370 million to SCOR Vie in return for 25 million of the life arm's shares. SCOR is also still studying bids for SCOR Vie, the report further said. In September, TCR-Europe reported that A.M. Best Co. downgraded the financial strength rating of SCOR and its guaranteed subsidiaries to B++ (Very Good) from A- (Excellent). A.M. Best Co at the same time downgraded the ratings on debt instruments issued or guaranteed by SCOR. A.M. Best said: "The rating action follows deterioration in SCOR's risk-adjusted capitalization as a result of slower than anticipated improvement in performance despite the positive action taken to curtail underwriting in certain areas." A recent announcement from Standard & Poor's Ratings Services put the long-term ratings of SCOR and its subsidiaries on CreditWatch with developing implications. VIVENDI UNIVERSAL: Simplifies Vodafone Partnership in France ------------------------------------------------------------ Vivendi Universal and Vodafone Group Plc announces a number of agreements designed to further improve the performance of Cegetel Groupe, as well as optimize the cashflow between Cegetel Groupe and its shareholders. There are four such agreements: (a) Vodafone and SFR have signed an agreement to increase their cooperation and their joint economies of scale in a number of different areas: (i) The coordination of their activities in the development, and rollout of new products and services, including Vodafone live! which will be launched later this month and, (ii) The development of operational synergies in procurement (including IT and technology) and best practice sharing. The partners expect that these arrangements will further enhance SFR's competitiveness and will therefore benefit both SFR's customers and shareholders. (b) Vivendi Universal and Vodafone have agreed in principle to simplify the structure of Cegetel Groupe through the merger of Transtel, Cofira and SFR into Cegetel Groupe, to be renamed 'SFR'. Vivendi Universal would hold 55.8% and members of the Vodafone group would hold 43.9% of the share capital of the merged entity. The balance of the share capital would be held by individuals who were formerly minority shareholders in Cofira. Providing the mergers receive regulatory approvals in France and final board and shareholder approvals, it is currently expected that these mergers would be implemented in the fourth quarter of 2003. This project is being submitted for information and consultation with employee representative bodies. (c) Vivendi Universal and Vodafone have agreed to establish the payment of quarterly dividends by the merged entity to its shareholders from 2004. This would enhance the access of both shareholders to the cash flows generated by the company. In addition, Vivendi Universal and Vodafone have agreed in principle that Vivendi Universal would be able to access available cash pro rata to its shareholding from the merged entity through a cash pooling agreement, up to a limit of EUR250 million. Advances under the cash pooling agreement would be repayable on the date on which quarterly dividends become payable by the merged entity. Providing this agreement receives final board approvals, it would become effective on the date on which the mergers of Transtel, Cofira and SFR into Cegetel Groupe are completed. (d) As previously announced, Cegetel Groupe and SNCF have agreed to merge Cegetel Groupe's fixed line business, Cegetel SA with Telecom Developpement, the joint venture between Cegetel Groupe and SNCF, which operates the largest alternative national digital fixed line network in France. Cegetel Groupe will own 65% of the merged company. The new company, to be renamed 'Cegetel' will build on this merger to launch more competitive broadband services focusing initially on the ISP and corporate markets, and then on the consumer market. It is currently expected that this merger, which is subject to board, shareholder and regulatory approvals in France, would also be implemented in the fourth quarter of 2003. To See Simplified Structure of Plan: http://bankrupt.com/misc/Vivendi_Structure_of_Plan.htm CONTACT: VODAFONE GROUP Tim Brown, Group Corporate Affairs Director Phone: +44(0)1635 673310 Melissa Stimpson, Investor Relations Darren Jones, Investor Relations Phone: +44(0)1635 673310 VIVENDI UNIVERSAL Daniel Scolan, Investor Relations (France) Phone: +33(0)171 71 32 91 Laurence Daniel, Investor Relations (France) Phone: +33(0)171 71 12 33 Eileen McLaughlin, Investor Relations (New York) ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Revives Offer to Sell Stake in Globe Telecom -------------------------------------------------------------- Deutsche Telekom has dropped some of the demands it attached to the sale of its 24.8% stake in Globe Telecom on its second approach to co-owners, Ayala Corp. and Singapore Telecom. Ayala, the Philippines' biggest conglomerate, said Deutsche Telekom was no longer requiring its partners to buy all of its 37.8 million shares in Globe Telecom. The shares, which gained 20% since the first offer in August, are now worth more than US$530 million. A company insider said Ayala is interested in the new offer, according to the Financial Times. Ayala, owner of 32.7% of Globe, and SingTel, which owns 29.1%, have 45 days to respond to the new proposal. Analysts told the paper Deutsche Telekom is using Globe Telecom's share price gains to move things forward. "It is good for both sides: Deutsche Telekom gets more money than initially expected in August and on that basis it also has the leeway to offer concessions such as a discount to the market price," said Stefan Borscheid at HVB. Deutsche Telekom promised to shed non-core operations on the way to reducing debt; and has already achieved year-end targets. ENERGIE BADEN-WUERTTEMBERG: Divests East German Units ----------------------------------------------------- Germany utility company, Energie Baden-Wuerttemberg AG, is looking for buyers for its East German subsidiaries, a report from Intesatrade, citing Frankfurter Allgemeine Zeitung said. The assets up for sale include Esag Energieversoorgung Sachsen Ost AG, in which EnBW has a 50.3% stake; Gaso Gasversorgung Sachsen Ost GmbH, and several stakes in local and regional utilities. The Karlsruhe-based company suffered substantial losses due to "legacy burdens." It recently confirmed in an open letter to employees that it aims to reduce employment costs by EUR350 million by 2006. The company said this would be done by encouraging workers to opt for early retirement, dismissing some employees, and implementing a four-day workweek with a corresponding wage reduction. ========= I T A L Y ========= FIAT SPA: Expects New Models to Increase German Sales Next Year --------------------------------------------------------------- The head of Fiat's German unit, Klaus Fricke, hopes to increase the carmaker's market share in Germany next year with its new Fiat Panda and Lancia Ypsilon models, says Dow Jones, citing Die Welt. Mr. Fricke wants to increase this year's projected EUR1.9 billion sales to at least EUR2 billion in 2004, by selling between 139,000 and 140,000 cars, up from this year's target of 130,900. Fiat will launch the Lancia Ypsilon this Saturday. Fiat Auto lost EUR1.9 billion (US$2.2 billion) in two years as its market share for Fiat, Alfa Romeo and Lancia cars dwindled. Fiat Auto shares have fallen almost 17% this year after plunging 56% last year. Fiat, the parent company posted a loss of EUR3.9 billion last year, and its share of the European car market has dropped by nearly half since 1990 to 7.6%. Even in Italy, Fiat's market share has declined to 27.2% from more than twice that in 1990. ===================== N E T H E R L A N D S ===================== GETRONICS N.V.: Reports Positive Pre-tax Q3 Earnings ---------------------------------------------------- As operational recovery continues, as evidenced by the preliminary financial results of Q3 2003 for the ongoing business (including divestitures), Getronics N.V. announces that it has launched an offering of approximately EUR100 million of unsubordinated Convertible Bonds due 2008. Getronics is issuing the Bonds to benefit from the attractive financing opportunities currently available in the convertible bond market. The net proceeds of the issue of the Bonds will be used to facilitate the refinancing of the company's existing debt. CONVERTIBLE BOND (a) Up to EUR100 million unsubordinated convertible bond. (b) Coupon range: 5-6%. (c) Conversion premium range: 20-25%. (d) Maturity: 5 years PRELIMINARY UNAUDITED THIRD QUARTER RESULTS (ongoing business *) (a) Service revenue in Q3 2003 was about EUR446 million and represents approximately 74% of total revenue (2002: EUR487 million and 67.7% of total revenue). (b) Service revenue per average employee was 0.7% lower than Q3 2002 (at constant exchange rate: 4.7 % higher). (c) EBITAE** circa EUR4 million (Q3 2002: negative EUR11 million). (d) The vast majority of countries performed on or above forecast Q3. (e) Restructuring and recovery plans in Italy and the Netherlands remain firmly on track. * excludes divestitures ** EBITAE: Earnings before interest, taxes, amortisation and exceptional operating items NON-CORE DISPOSALS PROGRAM (a) DigitalNet shares to be sold for US$27 million resulting in a book profit of circa EUR5 million during Q4. (b) Shares in the South African based IT company CS Holdings Ltd. sold for EUR2.6 million. (c) The proceeds of the transactions will be used to further strengthen the Company's balance sheet. CONVERTIBLE BONDS Getronics announced Wednesday it has launched an offering of up to EUR100 million of unsubordinated Convertible Bonds due 2008. The convertible Bonds will represent a maximum of 18.3% of Getronics issued share capital. The maturity of the Bonds is 5 years. The Bonds will be issued at 100% of the principal amount and will have a cash interest coupon of between 5% and 6% per annum payable annually. The conversion price is expected to be set at a premium of between 20% and 25% to a reference price of Getronics' ordinary shares (the 'Ordinary Shares') at the time of pricing. The financial terms and conditions of the Bonds was expected to be announced later Wednesday at the time of pricing. The Bonds will be offered to institutional investors only. The Bonds will not be offered to investors in the United States, Australia, Canada or Japan. The Bonds have not been and will not be registered under the U.S. Securities Act 1933, as amended and will be offered and sold only outside the United States in compliance with Regulation S under the Securities Act. Application will be made for the Bonds to be admitted to the Official segment of the Stock Market of Euronext Amsterdam N.V. Listing and settlement are expected to occur on or around 5th of November 2003. Getronics will publish a Prospectus shortly before that, in order to meet the listing requirements. ABN AMRO Rothschild is acting as Sole Bookrunner and Lead Manager. Stibbe, and Herbert Smith acted as legal advisor on behalf of the Company. To See Preliminary Results: http://bankrupt.com/misc/Getronics_Preliminary.pdf (a) EBITAE in Q3 for the ongoing business is circa EUR4 million (Q3 2002: negative of EUR11 million). (b) Services revenue per employee was EUR19.252, whilst services gross profit per employee was 5.9% higher than in Q2 2002 (at constant exchange rate: +4.7% and +13.3% respectively). (c) Average employees employed reduced by 7.8% to 23,166 in Q3 (Q3 2002: 25.116). (d) Restructuring expenses recorded in Q3 are EUR3 million. (e) Update on specific restructuring and recovery plans: Italy: The 500 employee Casa Integrazione program was finalized on July 7 2003. The Netherlands: The 600 employee restructuring plan remains on track, and the social plan was agreed with the trade unions and workers council in August 2003. NON-CORE DISPOSALS PROGRAM As part of the Getronics program to dispose of non-core assets Getronics is announcing two transactions. The proceeds of the transactions will be used to further strengthen the Company's balance sheet. Getronics has previously announced that it had reached agreement to sell its remaining shareholding in DigitalNet Inc. to a U.S.-based investment fund. In accordance with the agreement reached at the time of the sale of Getronics Government Solutions, a matching offer has now been received from DigitalNet itself. The sale of the shares is expected to close shortly for US$27 million, resulting in a book profit of circa EUR5 million. Getronics acquired the DigitalNet shares in 2002 as part of the sale of Getronics Government Solutions. DigitalNet builds, integrates and manages enterprise-wide network computing solutions for government organizations. In addition, Getronics sold Wednesday its shareholding in the South African based IT company CS Holdings Ltd. Total cash proceeds will be EUR2.6 million during Q4. Getronics acquired the CS Holdings shares in 2001 as part of the sale of Getronics South Africa (Proprietary) Limited. CS Holdings Ltd. is a South African IT Services and Solutions Company. OUTLOOK FOR ONGOING BUSINESS FOR FULL YEAR 2003 The ICT-market, with the exception of Italy and France, continued to be more stable through the summer and this trend is expected to continue. The recovery of employee productivity continued in Q3 2003 for the ongoing business and has resulted in an EBITAE of circa EUR4 million compared to a negative result of EUR 11 million in Q3 2002. This means that for the second quarter running since new management took control, Getronics has performed better than in the previous year. Management believes that EBITAE for Q4 2003 (traditionally the Company's strongest quarter) for the ongoing business will also show growth compared to last year, barring unforeseen and exceptional circumstances. As previously communicated, the Company expects to announce its complete unaudited third quarter results on 5 November 2003. Getronics will also publish an updated Company presentation on its website, entitled 'Getronics Yesterday, Today and Tomorrow': http://www.getronics.com ABOUT GETRONICS With 23,000 employees in over 30 countries and revenues of EUR 3.6 billion in 2002, Getronics is one of the world's leading providers of vendor independent Information and Communication Technology (ICT) solutions and services. Getronics today combines the capabilities of the original Dutch company with those of Wang Global, acquired in 1999, and of the systems and services division of Olivetti. Getronics is ranked second worldwide in network and desktop outsourcing and fifth worldwide in network consulting and integration (Source: IDC July-August 2002). Getronics designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics headquarters are in Amsterdam, with regional offices in Boston and Singapore. Getronics' shares are traded on Euronext Amsterdam (GTN). For further information about Getronics, visit http://www.getronics.com CONTACT: GETRONICS N.V. Investor enquiries Phone: +31 20 586 1964 Fax: +31 20 586 1455 E-mail: investor.relations@getronics.com KONINKLIJKE AHOLD: Lawrence Benjamin Named U.S. Foodservice CEO --------------------------------------------------------------- Ahold's Corporate Executive Board has appointed Lawrence S. Benjamin Chief Executive Officer at U.S. Foodservice, effective November 1, 2003. Interim CEO Robert Tobin will work with Benjamin during the transition, ensuring continuity in the operations and governance of the company until Benjamin outlines his strategic plan for the company and addresses any changes in other senior leadership positions at the company. Mr. Benjamin joins U.S. Foodservice from the NutraSweet Company in Chicago, Illinois, where he currently serves as Chief Executive Officer. He has held various executive positions in the food industry, including consecutively serving as President & CEO at Stella Foods (1994 - 1997) and Specialty Foods Corporation (1997 - 2001), both holdings of Oak Hill Capital Management. Prior to working with Oak Hill, he held several executive positions at different divisions of Kraft Foods. An advisory board will be installed at U.S. Foodservice to oversee the required changes in controls systems and to ensure the implementation of solid corporate governance principles throughout the entire company. This advisory board -- comprised of Ahold President & CEO Anders Moberg, Ahold CFO Hannu Ryopponen, Chief Corporate Governance Counsel Peter Wakkie, Corporate Executive Board member William Grize and Supervisory Board member Robert Tobin -- will work closely with the Ahold Corporate Executive Board. Additionally, two external members with extensive industry and business experience will be identified in due course. Commenting on the appointment, Anders Moberg said: "We are extremely pleased that Larry has decided to join the company. He has an excellent reputation for turning around and rebuilding companies in crisis and has successfully directed important recovery processes. Recently the focus of U.S. Foodservice has necessarily been on cleaning up the business. Larry's leadership and background perfectly complement our strategy for U.S. Foodservice. With the active support of the advisory board, Larry will play a key role in rebuilding and maximizing the value of the company." CONTACT: ROYAL AHOLD Corporate Communications Phone: +31.75.659.57.20 U.S. Dan Sweet, Weber Shandwick Phone: (202) 585-2819 ROYAL KPN: Redeems Bond Ahead of 2005, 2006 Maturity ---------------------------------------------------- Last week KPN again early redeemed several outstanding bonds for a total amount of in total EUR201 million. The early redemption is divided over the following bonds: Convertible bond 2000 - 2005 : EUR18 million Global bond 2000 - 2005 : EUR39 million Eurobond 1996 - 2006 : EUR30 million Eurobond 2001 - 2006 : EUR114 million Total : EUR201 million The early redemption of these bonds fits into KPN's policy to further reduce debt and maintain its prudent cash management, while considering further early redemptions if attractive. Until the announcement of KPN's Q3 results on November 10, 2003, KPN does not anticipate to early redeem any additional bonds. ***** The new management that saved Royal KPN from bankruptcy is aiming to slash net debt to EUR9.5 billion by the end of this year. By the end of June 2003 the company's net debt was EUR10.2 billion compared to EUR15 billion a year earlier. ROYAL PHILIPS: Reports EUR124 Million Third Quarter Net Profit -------------------------------------------------------------- Royal Philips released this latest financial update recently. These are the highlights: (a) Nominal sales decline by 4% mainly due to weaker currencies -- comparable sales up 6% (b) A loss of EUR126 million for income from operations -- this includes EUR152 million for restructuring and other charges in Semiconductors (c) Medical Systems income from operations of EUR138 million (d) Unconsolidated companies contributed EUR239 million to net income -- this includes EUR68 million for a dilution gain related to Atos Origin The third quarter 2003 In the third quarter of 2003, Philips recorded a net profit of EUR124 million (a profit of EUR0.10 per share) versus a loss of EUR330 million (a loss of EUR0.25 per share) in the same period last year. Nominal sales decreased by 4% over the same period last year, being impacted by the weakening of the U.S. dollar and related currencies (7%) and the downward effect from various divestments in 2002 (3%). Comparable sales increased by 6%, reversing the downward trend. Income from operations was a loss of EUR126 million versus a profit of EUR135 million last year. Income from operations included EUR197 million for restructuring and other charges, of which EUR152 million was at Semiconductors, EUR28 million at Consumer Electronics and EUR12 million charges at Miscellaneous. Pension costs were EUR84 million higher compared to Q3 2002. Income from operations of last year included EUR120 million for gains on the sale of businesses. The overhead cost reduction program delivered EUR379 million to-date. Integration savings at Medical Systems are in line with the EUR350 million targeted savings by year-end 2003. The cost reduction programs are on-track to achieving the targeted EUR1 billion in savings by 2004. Cash flow from operating activities was an inflow of EUR376 million. At 13.4%, inventories as a percentage of sales came to another record low for a third quarter, compared to 14.1% last year. During the quarter the net debt position decreased by EUR201 million to EUR5.2 billion. About Royal Philips Electronics Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 164,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at http://www.philips.com/newscenter To view full report: http://bankrupt.com/misc/Royal_Philips_3Q_Report.pdf ===================== S W I T Z E R L A N D ===================== ABB LIMITED: Postpones Sale of Swiss Buildings Companies -------------------------------------------------------- ABB Ltd., the Swiss-Swedish engineering giant that is mid-way through an ambitious restructuring program aimed at halving it in size, has postponed the sale of its Swiss building technology to the fourth quarter of this year. The divestment was originally intended to be completed until the end of the third quarter. Intesatrade news agency, citing Basler Zeitung, said attempts to sell the Swiss companies to the management or to some competitors failed. In 2002, the subsidiaries posted sales of CHF300 million and carried a staff of around 1,7000. ABB is currently disposing assets, including a power network and the Red Bank coal-powered electricity station in Australia, to reduce its debt to US$6.5 billion by year's end. The engineering company's debt burden reached US$8.3 billion at the end of the second quarter. ASCOM: French Unit's Restructuring to Take Effect this Month ------------------------------------------------------------ Ascom has initiated and partially already implemented substantial measures in France to adapt its capacities to the market conditions and to focus on its core competencies. The restructuring measures include the reduction of the workforce, the sale of production capacities and the transfer of employees. Due to the difficult market conditions and in the context of the restructuring of the activities in France, during recent days Ascom has been able to conclude talks with the social partners about a reduction of 77 jobs at its subsidiary Monetel SA in Valence, France. The reduction concerns mainly the payphones activities. The measures are to be put into effect already in October. In addition, Ascom has been successful in signing a contract with Ardelec SA, Saint-Agreve, for the sale of the production capacities of a unit belonging to Monetel SA. Part of this contract, which has already been agreed upon by the social partners of both companies, is the transfer of every 55 employees to the company Ardelec SA as of the end of October. Adaptations of the production capacities to the order volume also makes it necessary to reduce staff at Ascom HPF SA, Bonneville, by 94 from the total of 306 jobs. The employees have been informed about the plans and talks with the social partners have already been started. With these measures and their consistent implementation, Ascom fulfils the necessary adaptions in France to the market conditions. About Ascom Ascom is an international solution supplier with a comprehensive technology know-how. In the areas Transport Revenue (revenue collection and parking systems), Security Solutions (applications for security, communications, automation and control systems for infrastructure operators, public security institutions and the army), Network Integration (network solutions in the data/voice convergence market) and Wireless Solutions (high quality on-site communications solutions) the company has established itself with many years of experience in the execution of complex projects for demanding customers in important key markets. Ascom's offering covers analysis and consulting, system design and system integration, project management, engineering and implementation and goes right through to maintenance and support. The company has subsidiaries in 23 countries and employs a staff worldwide of more than 5000 employees. The Ascom registered shares (ASCN) are quoted on the SWX Swiss Exchange in Zurich. CLARIANT AG: UBS Agrees Asset Disposal Is on Track -------------------------------------------------- UBS, the banking and financial services group, rated Clariant AG's shares "buy", saying the specialty chemicals company's drive to offload unwanted units "seems to be on track." Online news agency Intesatrade reported that UBS expects Clariant's new core business to generate cash. Clariant has been in the process of streamlining its portfolio since last year, selling several of its units in Europe. It recently exited its hydrosulphite business with the closing of its last hydrosulfite production facility in Widnes, U.K. The latest move is a further step in the systematic implementation of Clariant's strategy to increase its concentration in specialty chemicals. Moreover, UBS said Clariant has many interested parties for Cellulose Ether business and should have received final bids for Electronic Materials. Clariant, which recorded consecutive losses in both 2001 and 2002, is expecting to return to profit this year. The company reported net loss of CHF648 million last year. CONTACT: CLARIANT INTERNATIONAL LTD. Rothausstrasse 61 CH-4132 Muttenz 1/Switzerland Investor Relations Phone: +41 61 469 67 48 Fax: +41 61 469 67 67 =========================== U N I T E D K I N G D O M =========================== AMP LIMITED: Moody's Affirms Short-, Long-term Ratings ------------------------------------------------------ Moody's Investors Service affirmed all the ratings of the AMP Group following the company's announcement that it has obtained "in principle" regulatory approvals for its plan to demerge its U.K. and Australian businesses. The rating considers the approval from both U.K. and Australian regulators a positive development, but noted that the plan has material changes from the one disclosed in May. It said the major differences relate to AMP Ltd. taking up a minority 15% cross-holding in HHG plc (the demerged U.K. business); HHG plc introducing convertible loan notes of AU$123 and a nominal level of corporate debt of AU$22 million post demerger will remain, but previously assumed to be zero; and expectations AMP Ltd. will raise approximately AU$1.2 billion via a rights issue and which it will only use to redeem for cash its AU$1.2 billion Reset Preferred Security. Moody's believe the company chose the mode of redeeming the Reset Preferred Security because it would probably be unable to treat this as tier 1 regulatory capital. The redemption of the Reset Preferred Security, a successful demerger, and rights issue, would likely improve AMP Ltd.'s financial leverage, it said. Moody's also said that AMP Ltd. will continue to have some contingent financing risk to HHG plc pending the latter's completion of a GBP100 million convertible loan note agreement (with an initial 50% utilization rate) to finance the demerger in advance of its listing. The listing will determine the value of AMP Limited's holding in HHG plc. Moody's perceives the exposure to HHG plc negatively, but it acknowledges that it facilitates the difficult demerger process. The ratings affirmed with a negative outlook are: AMP Life Ltd. Insurance financial strength at A1 AMP Group Holdings Ltd. Senior debt at Baa1 AMP (U.K.) Finance Services plc Senior debt at Baa1 AMP Group Finance Services Ltd. Senior debt at Baa1; subordinated debt at Baa2 AMP Henderson Global Investors Ltd. Preferred stock at Baa3 AMP Bank Ltd Long-term deposit rating at Baa1 Long-term senior debt at Baa1 Long-term subordinated debt at Baa2 Long-term junior subordinated debt at Baa2 National Provident Life Insurance financial strength at Baa3 Pearl Assurance plc Insurance financial strength at Baa3 NPI Finance plc Subordinated debt at Ba3 The ratings affirmed with a stable outlook are: AMP (U.K.) Finance Services plc P-2 commercial paper AMP Group Finance Services Ltd P-2 commercial paper AMP Bank Ltd P-2 commercial paper D Bank financial strength The group's long-term ratings have a negative outlook due to the uncertainty and transaction risks surrounding the completion of the demerger process. BAE SYSTEMS: To Axe Hundreds of Jobs in Plymouth Factory -------------------------------------------------------- Defense group BAE Systems has advised workers at the company's factory in Plymouth about plans to shed 280 jobs as part of its major restructuring program. The job-cuts would affect all areas, including manufacturing, management and engineering following a downturn in the business. This was to boost competitiveness and steady the business' financial footing. Managing director of the plant, David Squires, said: "We have fantastic technology and products which have been developed here but we must ensure that our infrastructure and cost base allow us to offer these products at prices which will continue to win us new business." The spokesman told Reuters the redundancies would not have a material financial impact on the group. The factory at Plymouth makes civilian and military components. It employs around 590 workers. BAE SYSTEMS: Expects Windfall from Middle East Defense Spending --------------------------------------------------------------- BAE Systems is set to benefit from increased defense spending in the Middle East as world oil prices pick up, a research report from broker UBS said, according to The Telegraph. "The higher-than-expected oil price since the start of 2003 has enabled the Saudis to build up a financial reserve that should enable BAE to win new contract work," the report said. The British company could expand its 15-year-old Al Yamamah contract with the Saudi government as early as next year. It was included among those likely to be tapped for the upgrading of the Saudi Air Force's fleet of 85 Tornado fighter aircraft in the near future. The Saudi government might also order Hawk jet trainer and Eurofighter aircraft from BAE, the broker said. UBS said BAE earnings would be flat in 2004, but rise by 23% in 2005 and 21% in 2006 if it expands its Saudi business, and complete the deal to sell 66 Hawk jet trainer aircraft to the Indian Air Force. BAE is likely to receive an immediate pre-payment of up to GBP10 million when the Indian Hawk deal is completed, it said. CLUB FEVER: Joint Administrators Seek Rescuers for Nightclub ------------------------------------------------------------ The Joint Administrators, William Duncan and Ian Schofield seek investors or purchasers for the recently opened business of Club Fever Limited (In Administration). Key features include: Chesterfield Town Centre location; Licensed Capacity 1,400; Leasehold term to June 2009; and Trading commenced August 2003 For further information interested parties should contact: Oliver Adams or Jeff Boltion/PKF Knowle House 4 Norfolk Park Road Sheffield S2 3QE Phone: 0114 276 7991 E-mail: oliver.adams@uk.pkf.com Homepage: http://www.pkf.co.uk EMI GROUP: Former Chief Seeks Backing for Possible Offer -------------------------------------------------------- The former president and chief executive of EMI's music division is trying to put together a bid for a possible takeover of the world's third-largest music group, according to the Financial Times. Music entrepreneur, Jim Fifield, in collaboration with the corporate finance arm of PricewaterhouseCoopers, is currently looking for financial backers among private equity groups to be able to come up with a buyout offer, the report said. He has reportedly approached Permira and BC Partners, but talks are said to be preliminary. EMI is currently pursuing separate talks with Time Warner, the U.S. media group, about a US$1.6 billion cash and stock offer for the group's recorded music division. EMI declined to comment on its talks with Time Warner or any approach from Mr. Fifield. Mr. Fifield was unavailable for comment, the report said. EMI had gross debt of GBP960 million ($1.6 billion) as of March 31, 2003. Standard & Poor's said its relatively narrow business profile compared with integrated media rivals increases risks to the group's business. Despite EMI's progress with restructuring, challenging market conditions imply that the group's credit ratios are likely to remain below investment-grade medians over the next few years. EQUITABLE LIFE: Crucial Ruling on Negligence Case Due this Week --------------------------------------------------------------- A court ruling on whether or not Equitable Life can proceed with a negligence lawsuit against its nine former non-executive directors will be released Friday, Reuters said citing High Court sources. The troubled British assurer is claiming GBP3.3 billion for alleged negligence and breach of duty on the part of the directors, including Peter Sedgwick, former chairman of Schroders, and Peter Davis, former deputy chairman of Abbey National. Equitable said the directors erred when it did not seek legal advice when applying a differential bonus policy in the early 1990s. It further argues that the directors should have acted earlier to cut all bonuses in 1999 and 2000 when it knew it was likely to face financial problems. Equitable narrowly escaped collapsed in 2000 when, after losing a legal battle, it was forced to honor guaranteed policies sold in the high interest rate years of the 1970s and 1980s at the cost of GBP1.5 billion. Far-ranging implications are expected once the court rules against the nine, Reuters said, citing industry experts. Insurers and non-executives candidates could demand that companies show good corporate governance procedures, and insurers could increase premiums for insurance policies covering directors. The premiums already soared 500% within the past two years following Equitable Life's decision to sue. The assurer is also claiming negligence against six former executive directors and is pursuing a GBP2.6 billion negligence claim against its former auditor Ernst & Young. INVENSYS PLC: Operating Profits at Lower End of Expectations ------------------------------------------------------------ Trading Update Invensys confirms that first-half trading for the Group as a whole was in line with expectations. Sales in Production Management were slightly ahead of the same period last year. Operating profit was at the lower end of expectations, primarily due to the costs of our continuing investment in growth initiatives, the slower than targeted improvements in productivity and the GBP5 million impact of resolving a number of legacy issues. Order levels are currently stable. Sales in Rail Systems were ahead of the same period last year, and operating profit was at the higher end of expectations. Trading in the Development Division was in line with expectations and corporate costs were reduced as planned. The company made a satisfactory start to its disposal program, with the completed sales of Baan and Teccor, which last year recorded operating losses. The process for the sale of other businesses, and the management of the Group's liabilities, is proceeding to timetable. Chief Executive of Invensys, Rick Haythornthwaite, said: "Invensys is in a period of significant transition, as we narrow our focus and work to reduce our liabilities. There remains much to be done to achieve our goal of building a stronger Invensys, both operationally and in terms of our balance sheet." The company will announce its Interim Results on November 13, 2003. CONTACT: INVENSYS PLC Victoria Scarth/Duncan Bonfield/Mike Davies Phone: +44 (0) 20 7821 3529 BRUNSWICK Nick Claydon/Sophie Fitton/Ben Brewerton Phone: +44 (0) 20 7404 5959 LAMCO TECHNICAL: Joint Administrators Seek Buyers ------------------------------------------------- The Joint Administrators, Derek Oakley and Ian Kings of Tenon Recovery offer for sale the business and assets of Lamco Technical Products Limited (In Administration), a components supplier to the circuit board industry. Key features are: Annual turnover of approximately GBP2.0 million; High specification leasehold premises (17,000 sq ft); and Extensive range of machinery and stock. CONTACT: Jeremy Woodside Tenon Recovery Arkwright House Parsonage Gardens Manchester, M3 2LF Phone: 0161 834 3313 Fax: 0161 827 8402 E-mail: nichola.lloyd@tenongroup.com MORGAN CRUCIBLE: Shares Rise as Takeover Rumors Circulate --------------------------------------------------------- Shares in engineering firm Morgan Crucible rallied to a 16-month high, rising 6.0% at 133.5p on what traders call vague bid speculation. Intesatrade quoted traders comment on rumors that Morgan Crucible could be a bid target: "It's a take-out play... it has been incredibly well bid last few days... One large seller has found a level to let stock go, and the large print has obviously warmed everyone up," one said. The company, however, said it was not aware of an approach. A company spokesman denied the rumors, saying there is "nothing going on as far as we are aware, we're not expecting to put out an announcement." Morgan Crucible had net debt of GBP295.1 million in 2002. Restructuring and cost-cutting efforts helped reduce the figure to GBP236.5 million. But it is still currently disposing non-core business to reduce the figure. NORTHERN CLINIC: Joint Receivers Sell Private Hospital ------------------------------------------------------ The Joint Administrative Receivers S C E Mackellar and C P Holder offer for sale, the business and assets of the Northern Clinic of Cosmetic Surgery Limited. (a) A purpose built private hospital providing cosmetic surgery services. (b) Freehold site approximate size 0.65 ha. (1.6 acres), located close to the M55, north of Preston. (c) Property comprises a nine-bedroom hospital with theatre consultancy and recovery accommodation. (d) Scope for extension. (e) 15 skilled staff. For further information, please contact urgently Alison Hughes, Kroll Limited, 5th Floor, Airedale House, 77 Albion Street, Leeds LS1 5AP, Phone: 0113 386 0800, Fax: 0113 244 9305, E-mail: alhughes@krollworldwide.com SAFEWAY PLC: J Sainsbury Eyes Half of 'For Sale' Stores ------------------------------------------------------- J Sainsbury CEO Peter Davis expects to make a bid for almost half of the Safeway stores that would be sold off under Wm Morrison's deal to buy Safeway, according to Reuters. There are 53 Safeway stores in line for disposal once Wm Morrison, which was given the green light by the U.K. Department of Trade and Industry to proceed with the bidding, agrees to buy Safeway. J Sainsbury is eyeing to grab 24 of these, the report said. It was reported early in the month that J Sainsbury and Wal-Mart's Asda, whose bids for Safeway were blocked, could propose to the Office of Fair Trading to shorten their ban on buying all or part of Safeway. The Office of Fair Trading is thought to have given both J Sainsbury and Asda draft undertakings. SKERMAN LIMITED: Appoints RSM Robson as Joint Administrators ------------------------------------------------------------ Insolvency Rules 1986 Insolvency (Amendment) Rules 2003 Registered number: 1022205 In the High Court of Justice No 10 of 2003 Nature of business: General Mechanical Engineering Trade Classification: 2852 Date of appointment of Joint Administrators: October 2, 2003 CONTACT: Geoffrey Rowley Michael Jonathan Christopher Oldham (office holder No.s 8919 and 7817) RSM Robson Rhodes LLP 186 City Road London EC1V 2NU VISUAL GOLD: Administrators Offer Business, Assets for Sale ----------------------------------------------------------- W J Kelly and P Finnity, the Joint Administrators of the above leading independent animation studio and distributor of high quality family programming worldwide, operating from leasehold premises in Telford, offer for sale their business and assets. The major assets of Visual Gold Limited (In Administration) comprise: (a) Rights owning company with a portfolio of intellectual properties (b) Well established and highly reputable name, combined with an advanced production facility (c) Strong client base (d) Highly skilled, flexible and experienced workforce (e) State-of-the-art technology, with one of the largest render farms in Europe (f) 2 in house post production facilities with integrated fiber optic network (g) Hi-end CGI computers (h) On site storage capacity of 5Terabytes (i) Strong relationships with international distributors and broadcasters For further information and sales brochure, please contact John Fletcher at Kroll Limited, Aspect Court, 4 Temple Row, Birmingham B2 5HG, Phone: 0121 212 4999, Fax: 0121 236 7323, E-mail: jfletcher@krollworldwide.com WALT DISNEY: To Hold Conference Call November 20 ------------------------------------------------ The Walt Disney Company will report fourth quarter and fiscal year 2003 financial results on Thursday, Nov. 20, 2003 immediately following the market's close. At 4:30 p.m. EST on Nov. 20, Michael Eisner, Disney chairman and CEO, Robert Iger, president and COO, and Thomas Staggs, senior executive vice president and CFO, will conduct a conference call to discuss information relevant to the results, as well as other recent or upcoming developments affecting Disney's operations. To participate in the conference call, please point your browser to http://www.disney.com/investorsapproximately five minutes prior to the start time. A replay of the call will be provided through Friday, November 28, 2003 at 5:00 p.m. on the same Web site. ***** TCR-Europe reported on September 29 that Walt Disney is selling as a going concern 480 chains of Disney Stores in North America and Europe for up to US$500 million (GBP310 million). CONTACT: The Walt Disney Company Wendy Webb, Investor Relations Phone: 818-560-5758 John Spelich, Corporate Communications Phone: 818-560-8543 ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors. Copyright 2003. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. 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