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/raid1/www/Hosts/bankrupt/TCREUR_Public/031030.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 30, 2003, Vol. 4, No. 215 Headlines A U S T R I A RHI AG: To Delist from Deutsche Borse in Favor of ATX in Vienna B E L G I U M SOBELAIR: SN Airlines Proposes Partnership Instead of Takeover G E R M A N Y DEUTSCHE TELEKOM: To Cut Personnel Costs to Save Jobs in Germany FORD MOTOR: Mulls Job-cuts, Shutdowns in German Operations MG TECHNOLOGIES: To Streamline Holding Structure by Year-end PROSIEBENSAT.1 MEDIA: Board Withholds Opinion on P7SI Offer WCM: Seeks Further Extension of EUR600 Million Loan WESTLB AG: Deadline for Brokerage Arm Bids Friday * Fitch: German CDO Ratings Stable Despite Bankruptcies N E T H E R L A N D S HAGEMEYER N.V.: Financial Uncertainty Weighs on Sales KONINKLIJKE AHOLD: Wal-Mart Vows to Win Brazilian Asset Auction R O M A N I A CFR SA: Standard & Poor's Assigns 'BB-' Rating; Outlook Positive R U S S I A METROMEDIA INTERNATIONAL: To Webcast Annual Meeting November 5 STATOIL: Promises to Shed Light on Horton Scandal S P A I N EMPRESA NACIONAL: 'BB+' Rating Withdrawn Due to Lack of Data S W I T Z E R L A N D ABB LTD.: S&P Ratings Outlook Changed to Positive SWISSAIR: Scandinavian Operator Eyes Stake in LOT Shareholding U N I T E D K I N G D O M BIG FOOD: Conference Call on Interim Results Set November 6 BOOSEY & HAWKES: Regent Refuses to Raise Offer, Withdraws Bid BOXCLEVER: Loss of Client Could Derail WestLB's Sell-off Plans CALEDONIA INVESTMENT: Chief Suggests Buyback to Settle Dispute CONNICK TREE: Joint Administrators Seek Buyers for Business EQUITABLE LIFE: Lord Penrose's Report to Put Govt in Hot Seat FIREFLY LIMITED: Creditors Have Until Nov. 28 to Prove Claims HARTLEPOOL FABRICATIONS: Talks with Potential Buyers Continue LEADFAIR LIMITED: Deadline for Filing of Claims November 28 LE MERIDIEN: Preferred Operator for U.K. Hotels Known Next Week METECNO LIMITED: Administrators Offer Business, Assets for Sale WALT DISNEY: Former Head Interested in U.S., European Stores ROYAL MAIL: National Walkout Feared as Unofficial Strikes Spread ********* ============= A U S T R I A ============= RHI AG: To Delist from Deutsche Borse in Favor of ATX in Vienna --------------------------------------------------------------- RHI AG (ISIN AT0000676903), based in Vienna, has been listed on the Vienna Stock Exchange since 1987. Since 1991, the share has been a member of the ATX, the lead index of the Austrian capital market. Since 1993, RHI has also been listed on the Official Market of the Frankfurt Stock Exchange under the securities identification number 874182, and in the market segment, General Standard, since its introduction. RHI has now applied for delisting of this second quotation in Frankfurt/Main with Deutsche Borse AG, as only less than 5% of the volume is traded on this stock market. The concentration of RHI's listing on the Vienna Stock Exchange, where RHI is traded via the powerful XETRA trading platform, also brings advantages for the German shareholders. Liquidity is concentrated and thus improved further to the benefit of all market participants; through continuous trading via the transparent electronic order book, transactions are possible at any time, also outside auction times. The professional support system with specialists and market makers offered by the Vienna Stock Exchange guarantees a high level of liquidity and fast handling of all international orders for RHI shares. RHI is convinced that the applied for delisting in Frankfurt/Main and the concentration on the ATX at the Vienna Stock Exchange are also in the best interest of investors. The regulations of the Prime Market of the Vienna Stock Exchange and the Austrian Corporate Governance Standards ensure that RHI will continue to meet international criteria of transparency and publicity in the future in the interest of investors and the capital market. ****** Hobbled by asbestos-related liabilities, U.S. subsidiaries of RHI filed for Chapter 11 bankruptcy in 2002. In August, these units presented their reorganization plan before the U.S. Bankruptcy Court for the Western District of Pennsylvania. Due to the complexity of the reorganization, the court review may take several months before a date is set for the confirmation hearing, TCR-Europe said. ============= B E L G I U M ============= SOBELAIR: SN Airlines Proposes Partnership Instead of Takeover -------------------------------------------------------------- SN Brussels Airlines' plans to take over troubled charter airline Sobelair has been shelved in favor of a partnership, Intesatrade reports. Citing La Libre Belique, the report said the Belgian airline needs to find EUR10 million in funds by the end of the year to keep operating and SN Brussels is considering an investment of this size. However, people familiar with the situation says the companies "are very far from an agreement." Sobelair incurred losses of more than EUR9 million just within a year after it was bought from bankrupt Belgian national airline, Sabena. Its troubles stem from an expensive leasing agreement with German company DSF, with which it pays US$650,000 per month for two 767s. The drop in air travel as a result of the conflict in Iraq further aggravated its troubles. TCR-Europe recently said a bankruptcy petition was lodged against Sobelair following reports that TUI Belgium, the airline's main customer, wants to create an airline with a limited number of flights from Brussels to vacation destinations. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: To Cut Personnel Costs to Save Jobs in Germany ---------------------------------------------------------------- Deutsche Telekom's management said it is planning to cut the wages and working hours of its German employees beginning next year, according to This is London. This is the only alternative to avoid job cuts, it said. Under the plan, extra compensations like Christmas bonuses for civil servants will be cut, while the working hours of employees who do not belong in this category will be cut by at least 10% from 38 hours a week. Half of the German company's 100,000 workforce are affected by the plan. Deutsche Telekom is under pressure to save about EUR13.5 billion (GBP9.36 million) in annual personnel costs to cut debt. It intends to dismiss as many as 55,000 jobs in 2005, including 3,100 employees at the central holding company. The company employs 256,000 people worldwide. FORD MOTOR: Mulls Job-cuts, Shutdowns in German Operations ---------------------------------------------------------- Ford Motor Co. is considering streamlining its German operation to bring its European operations back to profit, German magazine WirtschaftsWoche said, according to Bloomberg. The report cited Chief Operating Officer Nick Scheele saying the world's second-largest carmaker is not ruling out shutting factories and cutting jobs. As part of its worldwide shakeup, Ford is also cutting 3,000 jobs, or about 36% of the workforce, at its factory in Genk, Belgium. The plan is to lower personnel costs by 10%. These measures aim to bring the company's European operation to break-even by end of the year. In the first nine months this year, sales in Western Europe fell 4.6% while the overall market declined by 1.5%. MG TECHNOLOGIES: To Streamline Holding Structure by Year-end ------------------------------------------------------------ MG Technologies AG plans to streamline its multi-layered holding-company structures as the first step in its recently announced strategic focus on specialty mechanical and plant engineering. It plans to reduce its headcount in these holding companies by approximately 130 to roughly 280 by the end of this year. This initiative will affect the holding company of the Group head office of mg technologies ag (Frankfurt am Main) as well as the holding companies of its subgroups Lurgi AG (Frankfurt am Main), Lurgi Lentjes AG (Dusseldorf) and solvadis ag (Frankfurt am Main). Further adjustments to the holding-company structures will be made once the chemicals division has been sold. The functions of mg's holding company and those of GEA will then be merged. Only after this will a decision be taken as to whether this will require the Group's head office to be relocated. MG is conducting talks with employee representatives in order to minimize any adverse social impact of these headcount reductions at the holding companies. Apart from the streamlining of holding-company structures, the strategic refocusing of mg technologies ag announced at the beginning of October will comprise a strengthening of the balance sheet, based on the divestment of the Group's chemical businesses, the focus on the growth markets of process technology and components centered around GEA and the increasing of efficiency in industrial plant engineering. MG will inform shortly about the first steps taken in industrial plant engineering. Assertions by a Sunday newspaper in Frankfurt stating that after adjustments at Lurgi Lentjes AG, "its businesses will move to Lurgi," are purely speculative. PROSIEBENSAT.1 MEDIA: Board Withholds Opinion on P7SI Offer ----------------------------------------------------------- The Management Board and Supervisory Board of ProSiebenSat.1 Media AG published their joint reasoned opinion pursuant to Sec. 27 of the German Securities Acquisition and Takeover Act on the mandatory public offer submitted by P7S1 Holding. The two boards have come to the conclusion that the mandatory public offer complies with the statutory requirements. However, the boards are of the opinion that the current value of the ProSiebenSat.1 preference shares is higher than the purchase price offered by the bidder for the ProSiebenSat.1 preference shares. The Management Board and the Supervisory Board did not make a recommendation to the shareholders whether or not to accept the offer. P7S1 Holding is offering EUR6.00 per preference share (German securities ID: WKN 777117; ISIN: DE0007771172). This amount corresponds to the average weighted share price of these shares during the last three months before publication of the acquisition of a controlling interest in ProSiebenSat.1 by P7S1 Holding and thus complies with the provisions of the German Securities Acquisition and Takeover Act. P7S1 Holding is offering EUR8.00 for the ordinary shares. The acceptance period has been running since October 16 and terminates on November 14, 2003. The joint reasoned opinion of the Management Board and Supervisory Board of ProSiebenSat.1 Media AG has been published under http://www.ProSiebenSat1.com. CONTACT: PROSIEBENSAT.1 MEDIA AG Dr. Torsten Rossmann Company Spokesman Medienallee 7 D-85774 Unterfohring Phone: +49 [89] 95 07-11 80 Fax: +49 [89] 95 07-11 84 E-mail: Torsten.Rossmann@ProSiebenSat1.com WCM: Seeks Further Extension of EUR600 Million Loan --------------------------------------------------- WCM, the troubled Frankfurt-based investment group, seeks to extend repayment of a EUR600 million loan to prevent a partial break up of the real estate and investment company. Intesatrade, citing Financial Times Deutschland, said WCM Beteiligungs- und Grundbesitz's supervisory board chief, Dieter Vogel, is reportedly trying to convince creditor banks to extend Wednesday's deadline of the loan. WCM could lose its property holding unit, Immobilienholding IVG, if it fails to get an extension, the report said. WCM, which currently owns 46% of Sirius, is understood to be the main guarantor of the EUR600 million (US$707 million) loan of Sirius, the holding company that owns IVG, its principal asset. It reported a EUR861 million (US$997 million) loss last year due to writedowns on many of its shareholdings, concentrated in the mid-cap M-Dax, but also comprising blue-chips such as Commerzbank, in which it holds nearly 6%. The investments were used as security for loans by Karl Ehlerding, whose family is a 46% stakeholder. WESTLB AG: Deadline for Brokerage Arm Bids Friday ------------------------------------------------- German bank WestLB set the deadline for potential offers for its U.K. corporate finance and broking business, Panmure Gordon, on Friday, the Financial Times said, according to Intesatrade. The bank expects to receive six bids, including one from Lazard Plc and the broker's management, backed by 3i. Bridgewell is also reportedly interested. The parties could offer about GBP50 million, mostly involving assumed debt, according to AFX. WestLB is currently selling assets to return to profitability after a EUR1.7 billion- loss last year. The loss was mainly due to writedowns on refinancing provided to U.K. television rental company BoxClever. It is selling its brokerage arm, Panmure, at around GBP50 million in a deal that could involve any potential buyer taking on GBP40 million in debt, and paying GBP10 million in cash. Panmure specializes in brokerage, corporate finance, equities research and trading in small-to-mid-cap U.K. companies. * Fitch: German CDO Ratings Stable Despite Bankruptcies ------------------------------------------------------- The German economy has been hit by record corporate bankruptcies and weak growth in recent years, spooking investors in collateralized debt obligations (CDO) backed by German company debt. Yet high recovery rates on defaulted loans to small and medium- sized enterprises have helped deals featuring these obligors cling on to their ratings while large German corporates have generally suffered low recoveries, Fitch Ratings, the international rating agency, said on Friday. Further, the agency has found that recoveries have exhibited extreme tendencies with most loans recovering either above 90% or below 10%. Stefan Bund, senior director and head of German structured finance at Fitch, said: "Large loans in SME pools, many of which were granted to obligors initially deemed to be of investment grade quality, tended to recover at lower levels than smaller loans in the same pools." These findings are detailed in the report Recovery Rates in German CDO: Extreme Tendencies, published Tuesday and available on http://www.fitchratings.com Banks have, thus far, successfully recouped the majority of worked out bad debts from small and medium sized enterprises. This has in turn mitigated the impact of high default rates in some transactions, resulting in general rating stability. However, John Feeney, analyst in the Fitch CDO Performance Analytics team cautioned: "The default of a few large and unsecured exposures can radically alter a transaction's recovery rate and lessen the credit enhancement available -- increasing the risk of a credit rating downgrade." This suggests that the threat to noteholders is not only from a large volume of defaults per se, but also from the default of large unsecured obligors, migrating from initially good rating categories. "As such", Galen Moloney, analyst on Fitch's balance sheet CDO team remarked, "the risk profile of German small and medium sized enterprises transactions is not unrelated to patterns seen in international investment grade CDO transactions." These findings were taken from a detailed study of Fitch's entire database of CDOs. ===================== N E T H E R L A N D S ===================== HAGEMEYER N.V.: Financial Uncertainty Weighs on Sales ----------------------------------------------------- As previously announced, Hagemeyer on Tuesday issued its quarterly trading update for Q3 2003. The Group recorded net sales of EUR1,450 million in the third quarter ended September 30, 2003 (Q3 2002: EUR2,123 million). Divestments, particularly Tech Pacific and the termination of the Puma contract, resulted in a decrease in sales of EUR504 million. Adverse foreign exchange rate movements reduced sales by EUR57 million compared to the same period last year. For the Group as a whole, organic growth was 7.3% negative (EUR113 million). The weak market conditions of the first six months of 2003 continued throughout the third quarter, with no tangible signs of a recovery. As a result, the top line was under pressure in virtually every operating unit. In addition, the continued uncertainty regarding Hagemeyer's financial situation is having an impact on our sales, with competition exploiting our current position. Moreover, the major headcount reduction and other restructuring activities which are taking place in the PPS division are having an impact, albeit temporarily, on the top line as they prevent the organization from pursuing all available commercial opportunities. Professional Products and Services (PPS) Net sales for the PPS division were EUR1,297 million (Q3 2002: EUR1,475 million). Foreign exchange rate movements reduced sales by EUR73 million. Organic growth for the PPS division was 7.4% negative (EUR103 million). On a same working day basis, organic growth for the PPS division was 6.9% negative. Summary organic growth PPS (on a same working day basis) Q1 2003 Q2 2003 HY1 2003 Q3 2003 Nine months 2003 PPS Europe -9.5 -9.2 -9.3 -7.2 -8.6 PPS UK - 16.6 -19.1 -17.7 -9.5 -15.0 PPS Europe (excluding UK) -5.9 -4.8 -5.4 -6.3 -5.7 PPS North America -7.1 -6.5 -6.8 -9.1 -7.5 PPS Asia-Pacific 8.0 2.7 5.1 1.3 3.7 PPS Total -7.6 -7.5 -7.6 -6.9 -7.4 Per region, developments were as follows: (a) Europe Organic growth in the third quarter was 7.2% negative, compared to 9.3% negative during the first six months of 2003. (a) Central Europe In the Central European region (Germany, the Netherlands, Switzerland and Austria), the C&I (Construction and Installation) and industrial markets continued to decline. Hagemeyer's sales were negatively impacted by these developments. Positively, the cost reduction program in the region is well on track. (c) Nordics In the Scandinavian countries, market conditions continued to be soft. Sales in the Nordics region were down compared to the same period in the previous year, due to reduced sales of telecommunication products. In the C&I and industrial markets, Hagemeyer was able to maintain and even slightly improve its market share. (d) U.K. The U.K. electrical distribution market continued to be soft in Q3 2003 with an estimated 5% overall market decline compared to 2002. After a very difficult first six months, there are now clear indications that Hagemeyer U.K.'s market share has stabilized with an increase in sales per day of the electrical division for three consecutive months. Market research has confirmed that Hagemeyer has been able to retain the commercial relationship with the majority of its customers, although it has lost 'share of wallet' as a result of the drop in service levels following last year's introduction of new logistical and ICT systems. The U.K. company is working hard to improve its service offering to a level that will give Hagemeyer a true competitive edge. On the downside, the financial position of the Company represents a risk to the further recovery of our U.K. top line. (e) Spain Our Spanish operation continued to perform well and recorded modest organic growth. (f) North America The recovery in the U.S. manufacturing sector, in which Hagemeyer North America generates approximately 75% of its sales, has been sluggish and, more importantly, the decline in the number of jobs in this sector continues. Organic growth for the third quarter was a disappointing 9.1% negative, following a negative organic growth of 6.8% in the first six months of the year. Hagemeyer's ability to write and implement new customer contracts is being hampered by concerns amongst our customer and supplier base about the Company's financial position. While the implementation of our new logistics model continues, the company is focusing on improving operating margins through cost reductions, process improvements and business mix. (g) Asia-Pacific Organic growth in the Asia-Pacific region in the third quarter was 1.3% positive in a market, which was clearly less buoyant than earlier this year. Importantly, the national implementation of the Movex ERP system by the Hagemeyer Electrical Group in Australia has been successfully completed. This has required a major effort from the entire organization and is considered to have had an adverse, although difficult to quantify, impact on the top line during the conversion. With the new system in place, HEG is well set to refocus on expanding its revenue base in 2004. Agencies/Consumer Electronics Sales for the Agencies/Consumer Electronics division were EUR153 million in the third quarter (Q3 2002: EUR221 million). Foreign exchange rate movements had a negative impact on sales of EUR5 million, while divestments (mainly the Puma-business) negatively impacted sales by EUR54 million. Organic growth (non adjusted) was 5.8% negative (0.6% negative for the first nine months), reflecting weak summer sales of consumer electronics and softness in some of our Asia-Pacific markets. Financial Position 2 Net debt per September 30, 2003, amounted to EUR973 million, an increase of EUR77 million as compared to the net debt of EUR896 million per June 30, 2003. This is almost entirely caused by the seasonal increase in trade receivables, which could not be compensated by a corresponding increase in trade payables. For the last quarter of 2003, we forecast a reduction in working capital. Lower trade receivables, in combination with a decrease in inventories, are expected to more than offset an anticipated decrease in trade payables. This will contribute to the free cash flow, which is expected to be positive in Q4. For the full year, however, free cash flow, before proceeds from divestments, will be negative, whereas after divestments, free cash flow for the full year will be positive. As announced in the press release dated October 10, 2003, Hagemeyer has been reviewing strategies with its worldwide creditor group to refinance the Company and secure the required liquidity. Several refinancing alternatives are in advanced stages of negotiation. These alternatives involve a restructuring of the Company's debt, combined with a required increase of the Company's share capital with several hundred million Euros. Based on the ongoing discussions with its lenders, Hagemeyer is confident that the standstill agreement, which runs through November 9, 2003, will be extended until February 9, 2004. Naarden, October 28, 2003 HAGEMEYER N.V. Board of Management CONTACT: HAGEMEYER N.V. R.A.J. Hin Phone: +31.35.6957676 Homepage: http://www.hagemeyer.com KONINKLIJKE AHOLD: Wal-Mart Vows to Win Brazilian Asset Auction --------------------------------------------------------------- Wal-Mart Stores Inc. is ready to push its bid for the Brazilian assets of Royal Ahold to the limit, daily Folha de Sao Paulo said, according to AFX. The report cited Wal-Mart representatives saying the U.S. company is willing to pay "what is needed" to beat other bidders for supermarket chain Bompreco. The retailer did not specify the limit, but said it must not be so high that the profitability of the operation would be put at risk. Ahold previously asked US$680 million for the asset. This contrasts greatly with the US$300-400 million valuation of the business by the market. Interested parties are not willing to pay as much, the report said. Carrefour last week ruled out further acquisitions saying it would focus on growing organically. Cia Brasileira de Distribuicao is an affiliate of Casino Guichard Perrachon & Cie. ============= R O M A N I A ============= CFR SA: Standard & Poor's Assigns 'BB-' Rating; Outlook Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to the state-owned Romanian rail infrastructure company CFR SA. The outlook is positive. The rating on CFR reflects its importance to and support from the central government of Romania (foreign currency BB/Positive/B; local currency BB+/Positive/B). Government support is reflected in state ownership, direct budget subsidies, commitment to improving track access charge regulation, state guarantees on almost all of CFR's existing debt, and the potential to defer tax payments. The monopoly nature of CFR's business and importance to the Romanian rail sector will require ongoing financial support. The company's stand-alone profile is too weak to survive without it. CFR has poor operating efficiency, aggressive capital expenditure plans, very weak financial performance, and high counterparty risk. CFR relies on the ability of the state budget to support its activities. So far, it has not received sufficient subsidies to carry out its ambitious overhaul and modernization program. CFR's operating efficiency is low, primarily owing to overstaffing. Personnel costs make up almost 40% of total operating costs. Following a government program, CFR laid off about 8,100 employees, 18% of its workforce, as of Sept. 15, 2003. This should improve efficiency and the profitability of operations. The company's financial standing is weak, with very low and volatile cash flow. Operating cash flow in 2002 was close to zero, primarily owing to a build-up of payables to the budget and suppliers. Financial performance may only improve in 2004, when track access charge regulation should become more cost-reflective. "The positive outlook reflects that on the sovereign. Any change in the sovereign rating would have an impact on both the government's ability to support CFR's operational and financial obligations and CFR's position in the Romanian rail sector," said Standard & Poor's Infrastructure Finance credit analyst Mikhail Galkin. "The outlook also reflects the expected implementation of the new track access charge regime, which should support CFR's financial standing." =========== R U S S I A =========== METROMEDIA INTERNATIONAL: To Webcast Annual Meeting November 5 -------------------------------------------------------------- Metromedia International Group, Inc. (currently traded as: OTCPK:MTRM - Common Stock and OTCPK:MTRMP - Preferred Stock), the owner of interests in various communications and media businesses in Russia, Eastern Europe and Georgia, will Webcast its annual stockholders' meeting. The annual meeting, which will be held at 10:00 a.m. eastern time on Wednesday, November 5, 2003, will be broadcast live over the Internet. Those interested in listening to the live broadcast should go to the investor's section of the Company's web site at http://www.metromedia-group.comat least 30 minutes before the start of the meeting to register and download any necessary software. The broadcast will be available for replay through Wednesday, November 12, 2003 at the same location on the Company's website. About Metromedia International Group Through its wholly owned subsidiaries, the Company owns communications and media businesses in Russia, Eastern Europe and Georgia. These include mobile and fixed line telephony businesses, wireless and wired cable television networks and radio broadcast stations. The Company has focused its principal attentions on continued development of its core telephony businesses in Russia and Georgia, while undertaking a program of gradual divestiture of its non-core media businesses. The Company's non-core media businesses are comprised of six cable television networks, including operations in Russia, Romania, Belarus, Moldova and Lithuania. The Company also owns interests in seventeen radio businesses operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the Czech Republic. The Company's core telephony businesses include Peterstar, the leading competitive local exchange carrier in St. Petersburg, Russia, and Magticom, the leading mobile telephony operator in Georgia. Further information on the Company is provided from time to time in the SEC reports filed by Metromedia International Group, Inc., including its most recently filed quarterly report on Form 10-Q and the Company's annual report on Form 10-K for the year ended December 31, 2002. The Company is not under, and expressly disclaims any, obligation to update the information in this news release for any future events, including changes in its cash balances or other events affecting liquidity. Please visit our website at http://www.metromedia-group.com ***** The quotation of the company's equity securities on the OTC Bulletin Board trading system was removed on September 24, 2003 because the company failed to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 with the United States Securities and Exchange Commission by September 23,2003. Part of the delay was the transfer of the company's headquarters from New York to Charlotte, North Carolina as part of its continuing corporate restructuring initiative. CONTACT: METROMEDIA INTERNATIONAL GROUP, INC. Ernie Pyle Phone: 212-527-3800 # 112 STATOIL: Promises to Shed Light on Horton Scandal ------------------------------------------------- The Chair of Statoil, Kaci Kullmann Five, met Monday with union officials representing the Norwegian Oil and Petrochemical Workers Union (Nopef) and the Confederation of Vocational Unions in Statoil. Nopef, a member of the Federation of Norwegian Trade Unions and Confederation of Vocational Unions had approached the board to ask that further information on the Horton affair be given to Statoil's employees. Agreement was reached Thursday on the type of information that is required. This information will be imparted in, and in connection with, an interview with the chair in Statoil's in-house journal, which will be published on Friday, October 31. "I feel that we have had a constructive discussion on Monday" says Ms. Kullmann Five. "The board is maintaining focus on tidying up after the Horton affair while being as open as possible regarding the affair." "The most important thing for us has been to show the employees and the general public that Statoil is a healthy company which reacted against the Horton agreement, and that it was the top management that made errors of judgment," say Hans Marius Saltveit (Confederation of Vocational Unions) and Lill-Heidi Bakkerud (Nopef). "We feel that the information now to be provided by the board's chair in our in-house journal fulfils our wishes. We have had a good collaboration with the chair and we hope that this will contribute to more openness in Norway's most important company." Ms. Kullmann Five has also had a meeting with the Norwegian Society of Chartered Engineers, the Norwegian Society of Engineers and the Norwegian Association for Supervisors. Ms. Kullmann Five says that this was also a positive meeting. ***** Statoil lost its Chief Executive two weeks ago in the wake of a US$15.2 million Iranian bribery scandal involving the son of Iran's former president, Hashemi Rafsanjani. The debacle concerns the contract Statoil awarded to Horton International. The company previously admitted paying consultancy group Robert Horton US$5.2 million before canceling the contract last year. Police raided Statoil offices acting on suspicions that some of the money may have been used to bribe Iranian oil officials. CONTACT: Kaci Kullmann Five, Chair Phone: +47 91 63 00 40 Hans Marius Saltveit, YS Phone: +47 90 01 61 81 Lill-Heidi Bakkerud, LO/Nopef Phone: +47 95 23 60 98 Kai Nielsen, Public Affairs Manager Phone: +47 97 04 13 32 ========= S P A I N ========= EMPRESA NACIONAL: 'BB+' Rating Withdrawn Due to Lack of Data ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has withdrawn its 'BB+' long-term corporate credit rating on Spanish highway concessionaire Empresa Nacional de Autopistas SA. At the same time, Standard & Poor's has withdrawn its 'BB+' long-term ratings on the senior unsecured debt guaranteed by Empresa Nacional de Autopistas and issued by Autopista Concesionaria Astur-Leonesa SA, Autopistas de Navarra SA, and Autopistas del Atlantico Concesionaria Espanola SA. The withdrawal results from the lack of sufficient information made available to Standard & Poor's to substantiate the rating. Standard & Poor's has made many unsuccessful requests to obtain the information necessary to provide an accurate and timely rating assessment. Requests made to the consortium led by Spanish construction company Sacyr-Vallehermoso (not rated) and to Empresa Nacional de Autopistas, among others, have unfortunately not resulted in the required information being provided. Sacyr-Vallehermoso, supported by Banco Santander Central Hispano, SA (A/Positive/A-1) and a group of Spanish savings banks, has won the bid for Empresa Nacional de Autopistas's privatization. It is Standard & Poor's understanding that a EUR1.2 billion loan is currently being syndicated among a large group of banks that is to fund the privatization payment to state-owned Sociedad Estatal de Participaciones Industriales (SEPI; AA+/Positive/A-1+). The terms and conditions of this loan, or any alternative financing, are crucial in determining the accuracy of Empresa Nacional de Autopistas's rating, and could have resulted in a downgrade or upgrade. Nevertheless, repeated requests by Standard & Poor's for the basic terms and conditions of this transaction -- as made available to the syndicate banks -- have remained unanswered. Standard & Poor's was therefore left with no other option but to withdraw the rating, in line with its policy. While full information on the transaction could be available on Oct. 30, 2003, it is possible that funding will have already taken place by that date. Standard & Poor's is therefore extremely concerned that investors might be relying on a rating with which Standard & Poor's no longer feels comfortable. On June 26, 2003, following the end of the bidding process for Empresa Nacional de Autopistas's privatization, Standard & Poor's lowered and removed from CreditWatch with negative implications its long-term corporate credit rating on Empresa Nacional de Autopistas to 'BB+' from 'AA+'; a positive outlook was assigned. The downgrade was based on the company's new ownership structure, expected debt levels, and expected structural enhancements to insulate Empresa Nacional de Autopistas 's cash flows from those of the acquisition vehicles. Standard & Poor's has not received any indication since then that progress has been made in the ring-fencing of Empresa Nacional de Autopistas 's cash flows. Standard & Poor's, a division of The McGraw-Hill Companies, provides widely recognized financial data, analytical research, and investment and credit opinions to the global capital markets. With more than 5,000 employees located in 20 countries, Standard & Poor's is an integral part of the global financial architecture. ===================== S W I T Z E R L A N D ===================== ABB LTD.: S&P Ratings Outlook Changed to Positive ------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Switzerland-based engineering company ABB Ltd. to positive from negative, following the group's announcement that it has obtained underwriting commitments for an equity rights issue of $2.5 billion from a number of banks. At the same time, Standard & Poor's affirmed its 'BB+/B' corporate credit and 'BB-' senior unsecured debt ratings on ABB. In addition to the equity rights issue, which is expected to be finalized by mid-December 2003, ABB announced it has secured commitments from a syndicate of banks to provide a new $1 billion revolving standby credit facility with a tenor of three years. The new facility will become available to ABB upon completion of the rights issue and will replace the existing short-term US$1.5 billion revolving credit facility. The new facility will be provided on an unsecured basis if ABB manages to receive combined minimum gross proceeds of US$3 billion from the equity rights issue, a complementary long-term bond issue, and/or asset disposals. To that end, ABB said it will also seek to issue a new bond of up to EUR650 million ($750 million) over the next few weeks. "The proposed financing and recapitalization measures will solve ABB's liquidity problems as they will cover several years of debt maturities," said Standard & Poor's credit analyst Ralf Kortuem. "In addition, the large rights issue will reduce the group's high financial leverage. Nevertheless, the group's cash flow protection measures still require significant improvements and further deleveraging is needed before a ratings upgrade will be considered." "The positive outlook reflects the expectation that management has initiated the right steps to adequately strengthen the group's cash flow generation," added Mr. Kortuem. In particular, ABB must deliver the envisaged substantial cost savings from its group-wide restructuring program. ABB's second- and third-quarter results confirm that some progress on improving the group's cost position has already been achieved. In addition, successful execution of the group's disposal program is required. As well as the divestment of the upstream business of the Oil, Gas, and Petrochemicals division, where most progress has been achieved so far, some other asset disposals are also expected. The positive outlook also reflects reduced event risk from asbestos-related litigation, as the group will no longer need to access the debt capital market for new funding as long as uncertainties over the final outcome of the asbestos settlement persist. Although appeals against the favorable ruling by the U.S. District Court have been filed, no major setbacks to the process are currently expected. SWISSAIR: Scandinavian Operator Eyes Stake in LOT Shareholding -------------------------------------------------------------- Scandinavian Airline operator SAS AB is interested in the stake held by liquidators of bankrupt carrier Swissair in Polish national carrier LOT SA, SAS President Jorgen Lindegaard told daily Rzeczpospolita, according to Intesatrade. "It's obvious to us the time to invest in Poland is now," Mr. Lindegaard said. But SAS, which wants a 25.1% stake in LOT, has not yet signaled Poland's State Treasury about the possible transaction. The government is the controlling shareholder of LOT, and as such holds the key to any possible transaction. It also has not made its intention known to the Swiss banks handling Swissair's assets of its interest, Mr. Lindegaard said. "...it's going to happen only if we're certain the Polish State Treasury and LOT management want it to happen," according to him. SAS already owns hotel and retail operations in Poland. =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Conference Call on Interim Results Set November 6 ----------------------------------------------------------- The Big Food Group plc will be announcing its Interim results for the 24 weeks to September 12, 2003 on Thursday November 6, 2003. There will be a meeting for analysts at 9:15 for 9:30 a.m. at Smeatons Vaults, The Brewery, Chiswell Street, London EC1. ***** Fitch Ratings in September assigned Senior Unsecured and Short-term ratings of 'BB-' (BB minus) and 'B' respectively to The Big Food Group plc. The agency has also assigned a rating of 'B' to the GBP150 million 9.75% Senior Subordinated Notes due 2012. The Outlook is Stable. CONTACT: Hudson Sandler Phone: 020 7796 4133 Lara Meinertzhagen BOOSEY & HAWKES: Regent Refuses to Raise Offer, Withdraws Bid ------------------------------------------------------------- The board of Regent announces that it is lapsing its Offers for the ordinary and preference share capital of Boosey & Hawkes. On September 9, 2003, Regent announced the terms of recommended cash Offers for the entire issued and to be issued ordinary and preference share capital of Boosey & Hawkes. On October 3, 2003, the board of Boosey & Hawkes withdrew its recommendation for Regent's Offers and recommended higher cash offers for both the ordinary and preference share capital of Boosey & Hawkes made by Classic Copyright Limited. Following careful consideration, the board of Regent has concluded that the price offered by Classic Copyright is in excess of the price, which Regent is prepared to offer. Accordingly, it has decided to lapse its Offers with immediate effect. Regent believes that Boosey & Hawkes has an extremely strong management team and wishes them well in the future. In light of this announcement, the irrevocable undertakings to accept the Regent Ordinary Offer from certain of Boosey & Hawkes institutional shareholders in respect of, in aggregate, 2,086,095 Boosey & Hawkes Ordinary Shares will lapse. Boosey & Hawkes Shareholders who have already accepted the Regent Offers will cease to be bound by their acceptances and completed Forms of Acceptance, together with the relevant share certificates and other documents of title, will be returned by post to Boosey & Hawkes Shareholders within 14 days of the date of this announcement. Words and expressions defined in the Offer Document dated September 9, 2003 shall have the same meaning in this announcement unless the context otherwise requires. CONTACT: CITIGROUP Phone: 020 7986 4000 Simon Gluckstein CUBITT CONSULTING Phone: 020 7367 5100 Fergus Wylie Sarah Brydon BOXCLEVER: Loss of Client Could Derail WestLB's Sell-off Plans -------------------------------------------------------------- BoxClever's Endeva delivery and servicing arm was forced to immediately review its business plans after it emerged it would soon lose an important external client, the Telegraph found out. Retailer Argos uses Endeva's services to deliver all white and brown goods -- such as televisions, refrigerators and video equipment -- for its Argos stores and Argos Direct catalogue operation. Citing an internal memo it acquired, The Telegraph quoted Chief Executive David Cowan saying, "Obviously this is a major concern for Endeva and we are currently reviewing business plans in the light of this decision." Argos' withdrawal is feared to result to up 1,000 job-cuts within days, with a further 3,000 at risk. It also puts in doubt WestLB's plan to sell BoxClever, the troubled television rental business, which was under administration since last month. Tony Lomas, the administrator for PWC, said: "Endeva's management team were negotiating revised terms with Argos. I'm therefore surprised and disappointed with Argos' decision. I am now in discussions with Dave Cowan to decide what actions we can take to mitigate the loss of this contract." The staff was concerned that the administrators, PricewaterhouseCoopers, will only allow the statutory minimum redundancy payments. CALEDONIA INVESTMENT: Chief Suggests Buyback to Settle Dispute -------------------------------------------------------------- The chief executive of Caledonia Investments, Tim Ingram, said he would be prepared to consider a buy-back of shares from the Cayzer Trust Company, the private family vehicle that owns 38% of Caledonia, according to The Scotsman. The fund is expected to give greater liquidity to Cayzer Trust. Rebel family members, led by Sir James Cayzer, is looking for ways to exit from Cayzer Trust. The group attempted to wind up Caledonia and return cash to shareholders, but Cayzer Trust Company voted to maintain the status quo this month, effectively blocking the attempt. Takeover Rules prevent them from approaching Caledonia within six months, but they are understood to be secretly trying to find ways to pursue the plan. Ingram said: "The stance that I have is to urge the Cayzer Trust Company to sort out its problems and to make it known that, providing it was in the interests of Caledonia shareholders' interests as a whole, we would look at any proposition that might be put to us." He said Cayzer Trust has no gearing and assets not tied up in Caledonia, at such the family could buy out fellow shareholders without altering the structure of Caledonia. Mr. Ingram suggested a buy-back before but Caledonia needed the backing of Cayzer Trust for the move. The decision could increase the family's holding above 50%, forcing them to launch a takeover under market rules. Caledonia only converted into an investment trust in February this year. Caledonia has a range of large investments in companies including Close Brothers. It also owns Edinburgh Crystal. CONNICK TREE: Joint Administrators Seek Buyers for Business ----------------------------------------------------------- The Joint Administrators, Kiran Mistry and John Harlow, of HKM Harlow Khandhia Mistry offer for sale the business and assets of a Connick Tree Care Limited (In Administration), specializing in the Preservation and Maintenance of Trees based in the South East. Key features include: 5 sites (all in South East); fixed term contracts; numerous domestic clients; turnover Circa GBP2 million; dedicated workforce (approximately 50). For further information and a sales pack please contact Donna Brooks at: HKM, The Old Mill, 9 Soar Lane, Leicester LE3 5DE. Phone: 0116 242 5100; Fax: 0116 242 5201; E-mail: Donnab@hkm.co.uk EQUITABLE LIFE: Lord Penrose's Report to Put Govt in Hot Seat ------------------------------------------------------------- The government is one of the parties responsible for the demise of Equitable Life, according to the unpublished report of Lord Penrose into the circumstances leading to the collapse. The government bodies particularly criticized in the report ordered by the Treasury are the Department of Trade and Industry, and the Treasury itself, according to The Times. The DTI regulated the insurer until the end of 1997 when it turned over the responsibility to the Treasury. Hugh Burns, secretary to the Penrose inquiry, said all those named in the report have been informed of the results ahead of its publication, although it is understood they were not given the full copy of the document. The DTI and the Treasury, which still has the right to veto, confirmed receiving the notice. It is believed to have been given time to respond to the criticisms, at which time it could be given the whole copy of the investigation. The development brought new hope for Equitable Life policyholders who expected to receive compensation from the state if the inquiry founds the state has erred in its regulation of the firm. Equitable Life's current board if set to sue the government to uphold their claims. The insurer lost BP1.5 billion after a House of Lords ruling in 2000 forced it to honor pledges made to policyholders with guarantees on their policies. FIREFLY LIMITED: Creditors Have Until Nov. 28 to Prove Claims ------------------------------------------------------------- Notice is hereby given that the creditors of Firefly Limited which is being voluntarily wound up are required on or before November 28, 2003 to send in their full names, their addresses and descriptions, full particulars of their debts or claims and the names and addresses of their solicitors (if any) to the undersigned Michael C Georghiou, of Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis Street, CY-1066 Nicosia, P.O. Box 25549, CY-1310 Nicosia, Cyprus, the liquidator of the said company, and if so required by notice in writing from the said liquidator, to come in and prove their said debts or claims at such time and place as shall be specifie d in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. Mihael C Georghiou, Liquidator Abacus Financial Services HARTLEPOOL FABRICATIONS: Talks with Potential Buyers Continue ------------------------------------------------------------- The administrators of Hartlepool Fabrications are pursuing negotiations with a number of companies interested in buying the pipe manufacturer, according to Evening Gazette. Hartlepool Fabrications went under administration last month after sustaining a major loss on one order. Joint administrator Gareth Roberts, a partner with Oxfordshire-based Hurst Morrison Thomson, said: "No deadline has been set but I am expecting good news by the end of November." He said the company is continuing to trade and do business as usual, and employees are being paid regularly. The company is left with 55 employees after losing 35 staff two weeks ago. Mr. Roberts assured there would be additional job cuts in the firm. The contract that was the root of Hartlepool's trouble was the GBP5 million-deal with Costain Oil, Gas and Process to provide 21 pipe modules, up to 175 tons, for the Burlington gas project at Barrow in September. The contract was finished within six months, but the firm encountered problems during the shipment of the pipes from Sunderland to Barrow. Due to shallow waters, the company incurred an extra GBP150,000 for transporting the modules using low barges. Hartlepool, which was previously rescued from administration by Russell Foster's Tyne Tubes company, is due to receive another GBP5 million deal to supply pipe modules for use in North Sea gas fields, but the Norwegian company awarding the contract is yet to make a decision on the matter. LEADFAIR LIMITED: Deadline for Filing of Claims November 28 ----------------------------------------------------------- Notice is hereby given that the creditors of Leadfair Limited which is being voluntarily wound up are required on or before November 28, 2003 to send in their full names, their addresses and descriptions, full particulars of their debts or claims and the names and addresses of their solicitors (if any) to the undersigned Michael C Georghiou, of Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis Street, CY-1066 Nicosia, P.O. Box 25549, CY-1310 Nicosia, Cyprus, the liquidator of the said company, and if so required by notice in writing from the said liquidator, to come in and prove their said debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. Mihael C Georghiou, Liquidator Abacus Financial Services LE MERIDIEN: Preferred Operator for U.K. Hotels Known Next Week --------------------------------------------------------------- The successful bidder that would be allowed to pursue exclusive negotiations on the management of 11 U.K. hotels formerly operated by Le Meridien could be named next week, according to The Scotsman. Talks are now in an advanced stage, City sources said. Groups interested in the business include Hilton, Hyatt, Marriott, and Shangri-la. The hotels' future was put into uncertainty after it emerged early in the year it is likely to miss payment for rents due to landlord Royal Bank of Scotland. Two of the hotels, the Grovesnor House and the Waldorf in London, were placed in receivership in July. Le Meridien has about GBP1 billion of debt. It owes GBP750 million in senior debts to 14 banks, and at least GBP16 million in rent to Royal Bank of Scotland. Recession, war in Iraq and the SARS outbreak have led to a slump in the number of tourist guests, hitting earnings across the hotel sector. METECNO LIMITED: Administrators Offer Business, Assets for Sale --------------------------------------------------------------- The Administrators, J C Reid, A M Martin and J B Stephen offer for sale the business and assets of the Metecno U.K. Limited (In Administration). Key features: (a) Manufacturer and wholesaler of insulated panels for roofs and walls. (b) Produces a comprehensive range of FireGuard composite roof and wall panel systems, which have been tested to LPC and FM standards. (c) Freehold premises in Renfrew, near Glasgow Airport of 73,000 sq ft on 7.74 acres of land. (d) Broad U.K. customer base. (e) Experienced workforce of 33 people. (f) Turnover of GBP9.3 million for the year ended December 31, 2002 and GBP10.6 million for the year ended December 31, 2001. CONTACT: DELOITTE & TOUCHE LLP Lomond House 9 George Square Glasgow G2 1QQ Contact: James Stephen or Michelle Elliot Phone: 0141 304 5737 Fax: 0141 314 5895 WALT DISNEY: Former Head Interested in U.S., European Stores ------------------------------------------------------------ The private equity firm founded by the former head of Walt Disney International Europe is understood to be bidding for the GBP300 million chain of Disney stores in North America and Europe, according to the Telegraph. Carlton non-executive Etienne de Villiers, who founded Englefield Capital last year, was president and managing director of Walt Disney International Europe before he joined Carlton in September 2001. It is his knowledge of Disney that prompted him to bid, according to the report. Disney put the 480-strong retain chain last month, two years after it sold its Japanese stores to the Oriental Land company. This was after slump in revenues forced it to cut back in America. Mr. de Villiers is quoted on Englefield's website as saying: "We believe that growth businesses in the middle market benefit from having active operational input from investors who have been there before." Disney is understood to be hoping to receive a percentage of the stores' profits after the sale -- a condition that was the reason why a number of private equity firms backed away after investigating the asset. This is aside from the fact that most of the Disney stores are leasehold. Disney has 37 stores in the U.S., 46 in continental Europe and 60 in the U.K., including at Covent Garden and Oxford Street in London. ROYAL MAIL: National Walkout Feared as Unofficial Strikes Spread ---------------------------------------------------------------- Speculations that the current unofficial strikes could escalate into a national strike are now swirling across the country as wildcat strikes hit London, Southend, Acton and Paddington. The tension caught on earlier across the north, north-west, southwest, southeast, central and east London, Romford, Ilford, Dartford, and Greenford when 2,500 staff at the Mount pleasant sorting office joined other sorting offices in refusing to handle mail backlogs. According to This is London, between 15,000 and 20,000 of the capital's 28,000 Royal Mail staff are now on unofficial strike. Royal Mail admitted it had "no clear picture at the moment" of what percentage is no longer working. The unofficial strikes were fueled by workers' dissent on changes to overtime and the way in which workers' views are represented according to staff leaders. ********* 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *