/raid1/www/Hosts/bankrupt/TCREUR_Public/031112.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Wednesday, November 12, 2003, Vol. 4, No. 224
Headlines
B E L G I U M
FORD MOTORS: Nears Final Deal on Pay Package for Early Retirees
F R A N C E
ALSTOM SA: Czech Buyer Suspends Payment on Pandolino Trains
ALSTOM SA: CEO Dismisses Possible Takeover by Siemens
RHODIA SA: Moody's Downgrades Ratings; Outlook Negative
VIVENDI UNIVERSAL: Reports Lower Third Quarter Revenues
VIVENDI UNIVERSAL: Seeks Amendment to Terms of 2008, 2010 Notes
G E R M A N Y
INFINEON TECHNOLOGIES: Reverses Losses in Previous Quarters
WESTLB AG: Odeon Stake in 2004 Auction List, Says Report
WESTLB AG: Nears Final Agreement with Lazard on Panmure Sale
I R E L A N D
ELAN CORPORATION: Third Quarter Sales Down 50%, Say Analysts
ELAN CORPORATION: Closes Offering of US$460 Mln Notes Due 2008
N E T H E R L A N D S
BUHRMANN N.V.: Debt Reduced with Sale of Paper Merchanting Unit
KONINKLIJKE AHOLD: First-half Operating Income Down 48.4%
KONINKLIJKE AHOLD: Ratings Status of Pass-through Trusts Revised
LAURUS N.V.: Cuts Prices at Edah, Super De Boer, Konmar Stores
ROYAL KPN: Records Revenue Growth, Strong Cashflow in Q3
P O L A N D
UPC POLSKA: Final Voting Ballots Expected November 24
S P A I N
LYCOS EUROPE: Expects EUR100 Mln from Paid Services in 3-5 Years
U N I T E D K I N G D O M
BRITISH AIRWAYS: Second Quarter Profit Dives More than 50%
BRITISH AIRWAYS: Chairman Marshall to Step Down Next Year
BRITISH ENERGY: Posts New Common Codes and ISIN for Bonds
CABLE & WIRELESS: Conclusion of U.S. Arm Sale Within Weeks
CENARGO INTERNATIONAL: Administrators, Lenders Reach Rescue Deal
GOSHAWK INSURANCE: Shuffles Board Due to Syndicate 102 Run-off
GOVETT SECURITIES: Hires Gartmore as New Investment Manager
HIBERNIA FOODS: Administrator Receives At Least 50 Tenders
INVENSYS PLC: To Detail Plan for Powerware Business Soon
LEEDS UNITED: Pressures Creditors to Take Debt Haircut
SSL INTERNATIONAL: Receives Three Bids for Medical Unit
WEMBLEY PLC: Rebel Shareholders Want Executive Chairman Replaced
WEMBLEY PLC: Company Profile
*********
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B E L G I U M
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FORD MOTORS: Nears Final Deal on Pay Package for Early Retirees
---------------------------------------------------------------
Negotiations regarding the terms of early retirement plan for workers at the
Ford factory in Genk are now in an advance stage, according to Expatica
News.
Last week, various workers unions acceded to management's proposals, which
include a plan to shorten working hours to save jobs. Also nearing
conclusion are talks over the social benefits package for about 1,000
workers who will be included in the proposed early retirement plan. A final
deal is expected not later than November 15, the day when a new policy that
would increase taxes for early retirement benefits takes effect.
===========
F R A N C E
===========
ALSTOM SA: Czech Buyer Suspends Payment on Pandolino Trains
-----------------------------------------------------------
Ceske drahy, the Czech train operator, has refused to accept further
delivery of the Pandolino trains it had ordered from Alstom S.A. and has
stopped paying for them as well, according to Czech Happenings.
The move was prompted by Alstom's failure to provide documents related to
modifications in the brake system of the trains. Alstom claims the brake
system is similar to those used in high-speed trains in Europe, but with
'innovations.' Czech Television said these innovations have not been tested
yet and therefore needs approval from an international railway authority.
Alstom marketing head, Igor Snopek, said the company will forward the
documentation shortly.
Ceske drahy spokesman, Petr Stahlavsky, said there are other problems with
the trains, but refused to elaborate on them. He admitted, however, that
the trains would be put in operation in the middle of June 2004, as
scheduled. So far, Ceske drahy has only accepted one of the seven trains
ordered for CZK4.5 billion. It plans to start testing the trains with
passengers soon and trial operation between Dresden and Vienna would begin
June 13. Originally, the trains should have been put in operation five
years ago, but because of financial problems, the original contractors, Fiat
and Siemens, had to delay delivery. Production was subsequently assumed by
Fiat and later by Alstom.
"The trains should travel in the Dresden-Prague-Vienna corridor, cutting
traveling time by 20 percent. Later, they should be used on connections to
Bratislava, Budapest and Warsaw," Czech Happenings said.
ALSTOM SA: CEO Dismisses Possible Takeover by Siemens
-----------------------------------------------------
Alstom Chief Executive Officer Patrick Kron assures the group can survive
alone, without having to be taken over, according to Frankfurter Allgemeine
Zeitung.
Dismissing suggestions Alstom could be bought by Siemens AG, Mr. Kron told
the paper: "We will manage it (the current crisis) on our own."
He did not directly replied to rumors that Siemens might take over any
further units of Alstom, but said he believes "each part of Alstom can
survive on its own."
Siemens AG already acquired small and medium-sized turbine businesses from
Alstom. In August it completed a second transaction to buy industrial
turbines businesses for an enterprise value of EUR1.1 billion and net cash
proceeds of EUR950 million.
Siemens Chief Executive Heinrich von Pierer had previously been quoted
telling La Tribune he "could imagine" a tie-up between Siemens and Alstom's
high-speed train-making divisions, with France retaining a key role in the
venture.
RHODIA SA: Moody's Downgrades Ratings; Outlook Negative
-------------------------------------------------------
Moody's Investors Service lowered its Senior Implied rating for Rhodia from
'Ba2' to 'B1', and its senior unsecured and senior subordinated debt ratings
to 'B2' from 'Ba2', and 'B3' from 'Ba3', respectively. The outlook for the
ratings is negative.
According to the rating agency, the action reflects the very weak financial
profile of the group, the challenges involved in its disposal program, the
need to address an upcoming covenant breach at year-end and secure
medium-term funding, and the growing severity of loss expectations for
bondholders (senior and subordinated) vs. bank lenders.
Rhodia plans to dispose assets at their full value to raise at least EUR700
million over the next 12 months. This could be challenging considering the
still depressed environment for the chemicals industry. It could also face
challenge, according to Moody's, on its plan to negotiate funding with a
large number of financing parties, some with differing creditor or support
status.
Moody's expect the chemicals group's debt protection metrics to remain weak
over the foreseeable future.
VIVENDI UNIVERSAL: Reports Lower Third Quarter Revenues
-------------------------------------------------------
Vivendi Universal's (Paris Bourse: EX FP; NYSE: V) consolidated revenues for
the third quarter of 2003 amounted to EUR5,903 million compared with
EUR14,551 million for third quarter of 2002.
Excluding Veolia Environnement and the publishing businesses divested in
2002 and 2003, pro forma(1) third quarter 2003 revenues for Vivendi
Universal declined 7%, and 2% at constant currency.
For the first nine months of 2003, Vivendi Universal reported revenues of
EUR18,267 million compared with EUR44,541 million for the first nine months
of 2002. On a pro forma basis(1), revenues were down 10% and 3% at constant
currency, for the first nine months of 2003.
Despite the fall in the dollar against the euro, given the improvements in
its business units' performance, Vivendi Universal reiterates its earnings
targets for full year 2003:
(a) Very strong growth in operating income,
(b) Significant growth in cash flow from operations(2),
(c) Very strong growth in proportionate cash flow from
operations(3),
(d) Return to profit (excluding non-recurring items and
goodwill).
Due to the expected closing of the VUE-NBC merger in 2004, Vivendi
Universal's net debt(4), at the end of 2003, should be at around E13
billion. At the end of 2004, Vivendi Universal's net debt is expected to be
below EUR5 billion.
Consolidated revenues for the third quarter of 2003
In EUR million 3rd Q 3rd Q Variation Variation
2003 2002 pro forma
at constant
currency
----------------------------------------------------------------
SFR-Cegetel 1,941 1,804 +8% +8%
----------------------------------------------------------------
Maroc Telecom 387 399 -3% 0%
----------------------------------------------------------------
Total Telecom 2,328 2,203 +6 % +6%
----------------------------------------------------------------
UMG 1,115 1,328 -16% -9%
----------------------------------------------------------------
VUE 1,305 1,291 +1% + 13%
----------------------------------------------------------------
Canal Plus Group 969 1,167 -17% -15% + 3% (5)
----------------------------------------------------------------
VU Games 77 166 -54% -39%
----------------------------------------------------------------
Total Media 3,466 3,952 -12% -5%
----------------------------------------------------------------
Total for main
businesses 5,794 6,155 -6% -1%
----------------------------------------------------------------
Others(6) 109 170 -36% -38%
----------------------------------------------------------------
Total for continuing
operations 5,903 6,325 -7% -2%
----------------------------------------------------------------
Veolia Environnement - 7,184 NA
----------------------------------------------------------------
VUP assets sold in
2002 and 2003 - 1,042 NA
----------------------------------------------------------------
Total 5,903 14,551 -59%
----------------------------------------------------------------
Comments for Vivendi Universal's Media and Telecom businesses for the third
quarter of 2003
Telecom activity: Vivendi Universal's Telecom activity (SFR-Cegetel and
Maroc Telecom) revenues for the third quarter of 2003 amounted to EUR2,328
million, up 6%, compared with EUR2,203 million for the third quarter of
2002.
SFR-Cegetel:
SFR-Cegetel Group consolidated revenues for the third quarter of 2003
amounted to EUR1.9 billion, an 8% increase compared to the same period last
year.
Mobile telephony generated revenues of EUR1.7 billion, up 10% driven by
continuing strong growth of the customer base and a favorable customer mix.
Compared to September 2002, post-paid customer base grew 20% totaling 56.9%
of total customer base against 51.3%.
Fixed telephony revenues declined 7% to EUR200 million mainly explained by
unfavorable impact of year-end 2002 voice price decreases and an unfavorable
traffic mix.
Maroc Telecom:
Maroc Telecom's third quarter 2003 revenues amounted to EUR387 million, flat
at constant currency. Mobile sales are up 8%, at constant currency, thanks
to a larger pool of customers. Maroc Telecom has now more than 5 million
mobile users.
Fixed sales declined slightly mainly because of lower national voice traffic
and international incoming traffic. Maroc Telecom has more than 1.1 million
customers in the fixed activity.
Media activity: Vivendi Universal's Media activity (Universal Music Group,
Vivendi Universal Entertainment, Canal Plus Group and Vivendi Universal
Games) revenues for the third quarter of 2003 amounted to EUR3,466 million,
down 12% and 5% on a pro forma basis at constant currency, compared with
EUR3,952 million for the third quarter of 2002.
Universal Music Group:
Universal Music Group's revenues for the third quarter 2003 of 1.1 billion
were 16% below last year due to weak music market conditions and adverse
currency movements, particularly the strengthening of the Euro against the
U.S. dollar. In constant currency, sales were down 9%. The improved
performance in the quarter relative to the first half of 2003 reflected a
stronger release schedule and higher Music Publishing revenue. Best sellers
in the quarter were Bad Boy II O.S.T. and new releases late in the period
from Limp Bizkit, Sting and Nickelback. Other best sellers were the new
release from Mary J. Blige and the Now 13 compilation album in the U.S. Last
year's best sellers were Eminem and Nelly, both released in the second
quarter, and a new album of Bon Jovi.
In the U.S. total album unit sales as measured by SoundScan declined 6%
against the prior year. It is the fourth consecutive quarter that the rate
of sales has fallen. Universal Music Group's album market share fell
slightly to 27.9% versus 28.7% last year.
Vivendi Universal Entertainment:
Vivendi Universal Entertainment revenues amounted to EUR1,305 million, up 1%
and 13% on a pro forma basis at constant currency. Strong performance at
Universal Pictures was partially offset by the absence of any revenues from
Spencer Gifts, which was sold in the second quarter of 2003.
Universal Pictures Group revenues increased 38% on a comparable basis (stand
alone, pro forma, in dollars and in U.S. GAAP). Positive results were driven
by the theatrical successes of American Wedding and Seabiscuit versus The
Bourne Identity and Blue Crush in the same period of the prior year.
Additional upside was generated by a stronger home video performance from 2
Fast 2 Furious, as well as the Scarface and Animal House promotion, when
compared to Big Fat Liar and Dragonfly in the prior period.
Universal Television Networks revenues were up 5% on a comparable basis
(stand alone, pro forma, in dollars and in U.S. GAAP), reflecting ad sales
growth at both USA Network and Sci Fi Channel due to continued pricing
strength, as well as increased subscriber revenue at both networks.
Revenues at Universal Television Production increased 4%, primarily due to
the continued strong performance of the three Law & Order franchise series,
as well as an increased volume of cable production.
Universal Parks & Resorts revenues were essentially flat to prior period.
Canal Plus Group:
Canal Plus Group revenues for the third quarter 2003 amounted to EUR969
million. Excluding all scope changes, principally Telepiu, revenues were up
3%.
French pay-TV activities grew by 3% mainly thanks to the strong performances
of Canalsatellite and Media Overseas.
The motion picture activity benefited principally from the royalties
generated by Working Title movies.
Vivendi Universal Games:
Vivendi Universal Games revenues in the third quarter of 2003 amounted to
EUR77 million, a 54% reduction versus prior year; at constant currency,
revenues were down 39%.
In 2003, the key launches were Simpsons, Hit and Run, Warcraft III Expansion
pack in Europe, Homeworld 2, Bounty Hunter, Buffy, Chaos Bleeds and Crash V.
This compared to a stronger line-up in 2002, which included Warcraft III in
Europe, The Thing, Bruce Lee, Crash V, Fellowship of the Ring, The Scorpion
King and Spyro II. In addition, pricing pressures were far greater in 2003
than in 2002.
*****
Vivendi Universal provided preliminary, unaudited revenue information on a
French GAAP basis for the third quarter and the first nine months of 2003 to
'Balo' a French official bulletin for publication in accordance with French
regulatory requirements.
(1) The pro forma information illustrates the effect of the acquisition of
the entertainment assets of InterActiveCorp and the disposal of Vivendi
Universal Publishing assets in 2002 & 2003 as if these transactions had
occurred at the beginning of 2002. It also illustrates the accounting of
Veolia Environnement using the equity method at January 1, 2002 instead of
December 31, 2002. The pro forma information is calculated as a simple sum
of the actual revenues of Vivendi Universal's businesses (excluding
businesses sold) with the actual revenues reported by each of the acquired
businesses in each period presented. Additionally, the revenues of
Universal Studios international television networks are reported by Vivendi
Universal Entertainment instead of Canal Plus Group. This reclassification
has no impact on the total revenues of Vivendi Universal. The pro forma
revenues are not necessarily indicative of the combined revenues that would
have occurred had the transactions actually occurred at the beginning of
2002.
(2) Net cash provided by operating activities net of capital
expenditures and before financing costs and taxes.
(3) Defined as cash flow from operations excluding the minority
stake in all less than 100% entities.
(4) French GAAP gross debt less cash and cash equivalents.
(5) Variation on a comparable basis (excluding all scope
changes, principally Telepiu).
(6) Comprised of Vivendi Telecom International, Internet,
Vivendi Valorisation (previously reported in non-core
businesses), Vivendi Universal Publishing assets not sold
during 2002 and 2003 (Atica & Scipione, publishing
activities in Brazil) and the elimination of inter-company
transactions.
To view financial statements:
http://bankrupt.com/misc/Vivendi_Universal_Financials.htm
VIVENDI UNIVERSAL: Seeks Amendment to Terms of 2008, 2010 Notes
---------------------------------------------------------------
Vivendi Universal (Paris Bourse: EX FP; NYSE: V) commenced Friday
solicitation of consents to certain indenture amendments relating to its
US$935,000,000 9.25% Notes due 2010 and EUR325,000,000 9.50% Notes due 2010
and US$975,000,000 6.25% Notes due 2008 and EUR500,000,000 6.25% Notes due
2008. Vivendi Universal is seeking the consent of the holders of the Notes
to certain amendments to the terms of the Notes in connection with the
previously announced combination of National Broadcasting Company, Inc. and
Vivendi Universal Entertainment LLLP.
The consent solicitation is being made upon the terms and is subject to the
conditions set forth in a consent solicitation statement to be distributed
to all holders of record of the Notes. The adoption of the proposed
amendments requires the consent of holders of a majority in outstanding
principal amount of each of the April Notes and the July Notes.
Following, and subject to, the consummation of the VUE/NBC Transaction,
Vivendi Universal will make consent payments of E1.00 for each E1,000 of
Notes and $1.00 for each $1,000 of Notes to Noteholders who have properly
furnished, and not revoked, their consents with respect to such Notes on or
prior to 5:00 p.m., New York City time, on November 20, 2003, provided that
(i) the Requisite Consents are received by the information agent (and not
revoked) and (ii) supplemental indentures have been executed giving effect
to the proposed amendments. If the VUE/NBC Transaction is not consummated,
no consent fees will be paid. The record date for the consent solicitation
is 5:00 p.m., New York City time, on November 6, 2003.
The consent solicitation will expire at 5:00 p.m., New York City time, on
November 20, 2003, unless extended. The VUE/NBC Transaction is subject to
customary approvals from various regulatory agencies and is anticipated to
be completed in the first half of 2004.
Citigroup Global Markets Inc. is acting as Solicitation Agent in connection
with the consent solicitation. The Information Agent is Global Bondholder
Services Corporation.
Noteholders should contact Citigroup Global Markets Inc. (with questions
regarding the consent solicitation): (Toll Free) +1 (800) 558-3745;
(Collect) +1 (212) 723-6106; or +44 (0)20-7986-8969; or Global Bondholder
Services Corporation (to receive documents): (Toll Free) +1 (866) 470-3900;
+44 (0)20-7864-9136; or (Banks and Brokers) +1(212) 430-3774.
CONTACT: VIVENDI UNIVERSAL
Investor Relations, Paris:
Daniel Scolan,
Phone: +33 1 71 71 32 91
Laurence Daniel,
Phone: +33 1 71 71 12 33
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G E R M A N Y
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INFINEON TECHNOLOGIES: Reverses Losses in Previous Quarters
-----------------------------------------------------------
Infineon Technologies AG, the world's sixth largest semiconductor
manufacturer, had fourth-quarter revenues of EUR1.76 billion, up 19%
sequentially and up 37% year-on-year. Net income amounted to EUR49 million,
compared to a net loss of EUR116 million in the previous quarter and a loss
of EUR506 million in the fourth quarter of fiscal year 2002. Basic and
diluted earnings per share was EUR0.07, compared to a loss per share of
EUR0.16 in the previous quarter and a loss per share of EUR0.72
year-on-year.
EBIT earnings were EUR67 million, compared to a loss of EUR116 million for
the previous quarter and a loss of EUR295 million for the 2002 fourth
quarter.
This improvement was primarily achieved by increased productivity,
significant volume growth, improving DRAM pricing and a profit from the sale
of shares in the Taiwanese company ProMOS.
Free cash flow improved significantly to EUR388 million from EUR11 million
in the previous quarter, reflecting the improved profitability.
Since June 2002, the U.S. Department of Justice has been investigating
possible violations of U.S. Federal antitrust laws in the DRAM industry.
Subsequent to the commencement of the investigation by the U.S. Department
of Justice, a total of
24 purported class action lawsuits were filed against Infineon and other
DRAM suppliers in various federal and state courts in the United States.
The complaints allege violations of federal and state antitrust and
competition laws and seek significant damages on behalf of the plaintiffs.
In connection with these investigations and in accordance with U.S. GAAP,
Infineon established an accrual of EUR28 million in the fourth quarter of
fiscal year 2003. Infineon is, at this time, unable to predict the
financial and other impact that these investigations and lawsuits may have
on the company.
Issuer's information/explanatory remarks concerning this
ad-hoc-announcement:
Fiscal Year 2003 Results (October 1, 2002 to September 30, 2003)
Total revenues for fiscal year 2003 were EUR6.15 billion, up 26% compared to
the previous fiscal year. Net loss amounted to EUR435 million compared to a
net loss of EUR1.02 billion in the previous year. It includes a non-cash
charge of EUR182 million to increase the deferred tax valuation allowance,
compared to an allowance of EUR271 million established in the prior year.
Basic and diluted loss per share was EUR0.60, which improved from a loss per
share of EUR1.47 in fiscal year 2002. EBIT was a loss of EUR299 million,
compared to a loss of EUR1.14 billion in the previous year. This
significant improvement in EBIT loss was mainly due to increased demand and
productivity in all business groups as well as improved pricing for memory
products and higher demand for secure mobile solutions, especially during
the second half of the fiscal year.
Free cash flow improved significantly to a negative EUR53 million from
negative EUR360 million in fiscal year 2002. Infineon's gross cash position,
representing cash and cash equivalents, marketable securities and restricted
cash, rose to EUR2.8 billion in fiscal year 2003, an increase from EUR2.0
billion at the end of the prior year.
OUTLOOK
"I feel that we can talk about a market upswing but we should not become too
enthusiastic. For the 2004 fiscal year we plan to make capital expenditures
of between EUR1.0 to 1.5 billion and financial investments ranging between
EUR200 to 400 million. Given the more positive market prospects, we
anticipate moving towards the upper end of this range. We have positioned
ourselves to be on track with our strategic objectives, and expect to see
further growth in demand for our automotive semiconductors, and memory
products. In our Wireline
Communications business group, we are confident to see further growth in the
broadband access market for ADSL. In our secure mobile solutions business,
we expect to grow along with the market in fiscal year 2004," said Dr.
Schumacher.
Since the strong seasonal effect Infineon enjoyed in the fourth quarter 2003
will not hold throughout the full first quarter of fiscal year 2004, the
company expects lower average demand in the secure mobile solutions market
for the first quarter of fiscal year 2004. During fiscal year 2004, the
company expects growth along with the market for this business group.
For the first quarter of fiscal year 2004, Infineon remains cautious about
the wireline communication market due to ongoing strong pricing pressure,
still weak investment in infrastructure by carriers, and uncertainties
regarding standardization in VDSL. However, the company believes that the
broadband access market for ADSL will show solid growth later in fiscal year
2004. In general, Infineon expects solid growth for this business group in
the second half of fiscal year 2004.
Due to the slower growth of the worldwide automobile production in the first
half of fiscal year 2004, Infineon expects a moderate market growth for
automotive electronics and automotive semiconductor manufacturers. With the
change from single product business to complete application specific chip
sets,
Infineon anticipates an ongoing stable growth, which is faster than the
market in its automotive business. In its power management & supply
segment, the company is further confident for continuous growth.
In the fourth quarter of fiscal year 2003, Infineon saw increased sequential
demand and steadily rising prices for memory products. It expects a stable
level of demand during the first quarter of fiscal year 2004, mainly driven
by the Christmas season, and the need for increased system memory per PC.
According to estimates of major market researchers, a strong ten% growth in
PC unit demand is expected for fiscal year 2004, based on increasing
corporate replacement of older equipment. Supply growth is assumed to be
rather limited as a consequence of the low industry capital expenditure
levels of the last two calendar years.
"In fiscal year 2003, we have been growing faster than the market as a whole
and have increased our overall market share from 3.4% in calendar year 2002
to current 4.0% of the worldwide semiconductor market. Our Memory Products
group has further improved its number 3 position in the DRAM market.
Achieving profitability in the fourth quarter of fiscal year 2003 was a
major step towards increased profitability in the future. From today's
perspective, if market conditions remain steady, we are confident that we
will generate a profit for the entire 2004 fiscal year," commented Dr.
Schumacher.
WESTLB AG: Odeon Stake in 2004 Auction List, Says Report
--------------------------------------------------------
German investment bank, WestLB AG, is reportedly selling its 43% stake in
Odeon Cinemas early next year, according to The Times.
This divestment is related to the bank's withdrawal from portfolio
investments held within its principal finance group. The sale, however, is
contingent on the refinancing of Odeon's GBP290 million bridging loan, which
is due for repayment in March. Odeon is currently talking with several
banks, including WestLB, about this, the report said.
Along with Robert Tchenguiz, the Iranian property tycoon; Guy Dellal, a
private property investor; and Nigel and Trevor Green, who run the
Entertainment Group, an independent film distributor; WestLB bought Odeon
for GBP431 million in March this year. It is thought that the investment is
now worth less than GBP400 million after first-half attendance dropped due
to a shortage of good films and the summer heat wave. Last year Odeon
produced earnings before interest, tax, depreciation and amortisation of
about GBP45 million, the report said. This year's EBITDA is expected to
drop to GBP40 million.
According to The Times, WestLB is obliged to offer its stake to the other
investors in Odeon. Mr. Tchenguiz has previously said he would buy the
stake, but only with the cooperation of the Greens and Mr. Dellal.
"The company is attractive to investors such as Mr. Tchenguiz because it is
underpinned by about GBP200 million of property assets," The Times said.
WESTLB AG: Nears Final Agreement with Lazard on Panmure Sale
------------------------------------------------------------
Lazard, the preferred bidder for WestLB's Panmure Gordon, is edging closer
towards a final deal, according to the Financial Times. The independent
investment bank might already be able to discuss with its own staff this
week any changes in reporting lines after the takeover of Panmure, the
report said.
The recent progress is expected to enable the two sides to sign a contract
by the end of November, in line with WestLB's plan to complete the
transaction by the end of the year. WestLB is selling Panmure as part of
its restructuring effort following a record EUR1.7 billion (GBP1.2 billion)
loss last year. It initially received indications of interest for the
brokerage firm from 30 potential buyers, including the management team
backed by 3i, the venture capital firm.
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I R E L A N D
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ELAN CORPORATION: Third Quarter Sales Down 50%, Say Analysts
------------------------------------------------------------
Pharmaceuticals company Elan Corporation is expected to say its
third-quarter sales fell more than 50% this week, according to the Irish
Examiner. Brokers expect latest sales figures to come at US$165 million,
including US$128 million from retained profits. But loss per share would be
28 cents, according to analysts at NCB Stockbrokers. The per share loss is
an improvement from last year's results.
Analysts are also predicting the company's operating expenses to realign
with reduced base. "Management has guided that further disposals will occur
by year-end and that the restructuring program is now drawing to a close,"
they said.
Elan has already raised US$1.9 billion through a series of disposals over
the past year. It also recently raised a further US$173 million through an
offering of shares.
ELAN CORPORATION: Closes Offering of US$460 Mln Notes Due 2008
--------------------------------------------------------------
Elan Corporation, plc (NYSE:ELN) has completed the offering and sale of
US$460 million in aggregate principal amount of 6.50% Convertible Guaranteed
Notes due 2008 issued by Elan Capital Corporation, Ltd., a wholly-owned
subsidiary of Elan, and guaranteed by Elan. The offering and sale of the
Notes was made outside the United States to non-U.S. persons in reliance on
Regulation S under the Securities Act of 1933, as amended.
The Notes, the guarantee of the Notes and the shares to be issued upon
conversion of the Notes have not been and will not be registered under the
Securities Act and, unless so registered, may not be offered, sold or
distributed within the United States or to U.S. persons (as defined in
Regulation S under the Securities Act) except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act.
This release does not constitute an offer to sell or the solicitation of an
offer to buy any Notes.
In the United Kingdom, this announcement, in so far as it constitutes an
invitation or inducement to participate in the offering, is directed
exclusively at persons who fall within article 19 or 49 of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2001 (all such
persons together being referred to as relevant persons). This announcement,
in so far as it constitutes an invitation or inducement to participate in
the offering, must not be acted on or relied on by persons who are not
relevant persons. The securities referred to in this announcement will be
issued only to relevant persons. Stabilization/FSA.
About Elan
Elan is focused on the discovery, development, manufacturing, sale and
marketing of novel therapeutic products in neurology, severe pain and
autoimmune diseases. Elan shares trade on the New York, London and Irish
Stock Exchanges.
CONTACT: ELAN CORPORATION, PLC
Investors:
Emer Reynolds
Phone: 353-1-709-4000
800-252-3526
=====================
N E T H E R L A N D S
=====================
BUHRMANN N.V.: Debt Reduced with Sale of Paper Merchanting Unit
---------------------------------------------------------------
Highlights of Third Quarter 2003 Results:
(a) Higher EBITA Office Products North America on local currency
basis
(b) Lower sales European operations
(c) Continued positive available cash flow and debt further
reduced
To view key figures: http://bankrupt.com/misc/Buhrmann_Key_Financials.htm
Outlook
Comparable office supplies sales (i.e. excluding software) of the Office
Products North America Division for the fourth quarter of 2003 are expected
to be around the same level as last year, while software sales are expected
to improve from the weak third quarter of this year. The weakness in the
sales of the European Office Products and Graphic Systems operations is
likely to persist during the remainder of the year. Available cash flow
from continuing operations is expected to be positive in the fourth quarter.
CEO's Statement
Commenting on the developments in the third quarter of 2003, Buhrmann CEO
Frans Koffrie said: "Organic office supplies sales, excluding software, in
North America -- our largest market -- remained stable for the second
consecutive quarter compared with the corresponding period a year ago.
Although comparable software sales were markedly lower, the Office Products
North America Division reported third quarter operating results that were
slightly higher than a year ago on a local currency basis. The lower
overall performance of the Office Products Europe Division is mainly
attributable to operating losses in the U.K. and in Germany. We have
appointed a new Managing Director in the U.K., who has already taken steps
to strengthen the sales organization and to further reduce costs. We
continue to implement the restructuring program in Germany.
"The positive available cash flow from operations allowed us to further
reduce debt. In addition, the completion of the sale of the Paper
Merchanting Division at the end of October resulted in a substantial
reduction of interest-bearing debt. After this transaction Buhrmann has
become an even more focused leader in business services and distributions,
predominantly for the office markets."
To view full report and financials:
http://bankrupt.com/misc/Buhrmann_Third_Quarter_2003_Results.htm
KONINKLIJKE AHOLD: First-half Operating Income Down 48.4%
---------------------------------------------------------
Ahold on Friday published its 2003 half-year and second-quarter results.
Commenting on the results, Ahold CFO Hannu Ryopponen said: "We are very
pleased that following the filing of our 2002 audited Annual Accounts, we
are now able to resume the reporting of 2003 results starting with the
half-year numbers and on November 26, 2003 the third-quarter results.
"We expect that this will further improve the communication with everyone
who takes a keen interest in the development of Ahold and we see it as a
very important step towards returning to a normal and predictable reporting
calendar.
"The results in the first half-year of 2003 were disappointing and impacted
by the diversion of our management as a result of the events surrounding the
announcements on February 24, 2003, and the related investigations. I am
confident, however, that the new strategy which is also announced in more
detail today will help us to 'turn the corner' and restore the profitability
of the group in future years."
Net sales in the first half-year of 2003 amounted to EUR30.3 billion, a
decrease of 11.8% compared to the same period last year. The decrease in
net sales was largely attributable to lower currency exchange rates of in
particular the U.S. Dollar. The average U.S. Dollar to Euro exchange rate
decreased approximately 18% in the first half-year of 2003 compared to the
same period last year. Net sales excluding currency impact increased by
3.6% primarily due to a 3.2% increase in net sales at U.S. retail and a 1.7%
increase at Europe retail. Net sales at U.S. Foodservice declined by 0.7%.
Net sales were positively impacted by the consolidation of Ahold's
subsidiaries Disco and Santa Isabel in South America in April and July of
2002, respectively, as well as the acquisition of Lady Baltimore and Allen
Foods in September and December of 2002, respectively. These consolidations
and acquisitions combined contributed approximately 2% of the net sales
growth in the first half-year of 2003 excluding currency impact.
Operating income in the first half-year of 2003 amounted to EUR587 million,
a decrease of 17.2% compared to the same period last year. The decrease was
primarily caused by lower operating income in all business segments
including U.S. retail where operating income in U.S. Dollars was only
marginally lower. Operating income in the first half-year of 2002 included
a EUR372 million exceptional loss on related party default guarantee with
respect to debt defaults by Velox Retail Holding, Ahold's joint venture
partner in Disco Ahold International Holdings N.V. Goodwill amortization
totaled EUR90 million in the first half-year of 2003 compared to EUR144
million in the same period last year. Goodwill amortization decreased
compared to the same period last year due to lower goodwill balances
resulting from the goodwill impairment charges recorded in 2002. The
goodwill impairment charge of EUR88 million recorded in the first half-year
of 2002 related to the purchase of the remaining shares in Disco Ahold
International Holdings N.V. in July and August 2002.
Operating income before goodwill and exceptional items in the first
half-year of 2003 amounted to EUR677 million, a decrease of 48.4% compared
to the same period last year. See table below for a reconciliation of
operating income before goodwill and exceptional items to operating income.
Operating income before goodwill and exceptional items in the first
half-year of 2003 was also adversely affected by a lower U.S. Dollar to Euro
exchange rate. Excluding currency impact the decrease of operating income
before goodwill and exceptional items was 38.6% primarily caused by lower
operating income at U.S. Foodservice, Europe retail, South America and Asia
as well as higher audit, legal and consultancy fees.
Net sales increased in the first half-year of 2003 compared to the same
period last year through organic development at same stores and replacement
stores and new store openings. Comparable sales growth totaled 0.9% and
identical sales remained at the same level.
Operating income before goodwill and exceptional items decreased in the
first half-year of 2003 compared to the same period last year as a result of
lower income at Tops, Bruno's and Giant-Landover. Operating performance at
Stop & Shop and Giant-Carlisle continued to be very strong in the first
half-year of 2003.
Net sales at Albert Heijn declined in the first half-year of 2003 but this
was offset by strong sales growth at Schuitema and an increase in net sales
in Spain and Central Europe. Identical sales at Albert Heijn declined by
2.5%. In Central Europe and Spain, net sales increased due to the opening of
new stores.
Albert Heijn sustained lower operating income before goodwill and
exceptional items in the first half-year of 2003 compared to the same period
last year mainly as a result of lower sales and gross margins partly off-set
by lower operating expenses due to the start-up of cost reduction programs.
Schuitema improved its operating income before goodwill and exceptional
items mainly due to the higher sales level.
Operating loss before goodwill and exceptional items in Central Europe
decreased due to increased operating expenses for new stores and a lack of
spending power of customers as a result of a weak economy leading to a
pressure on net sales.
Operating loss before goodwill and exceptional items in Spain decreased due
to lower gross margins as a result of lower selling prices in order to
become more competitive in the market. Furthermore, operating costs in
Spain increased due to costs associated with the closing of a number of
stores.
Net sales of U.S. Foodservice in the first half-year of 2003 were negatively
impacted by the events surrounding the discovery of accounting
irregularities at U.S. Foodservice as announced on February 24, 2003. The
acquisition of Lady Baltimore and Allen Foods in September and December of
2002, respectively, contributed approximately 1.5% of the net sales growth
in the first half-year of 2003.
U.S. Foodservice's operating income before goodwill and exceptional items in
the first half-year of 2003 was also negatively impacted by the events
surrounding the discovery of the accounting irregularities resulting in
substantial pressure on gross margins, especially in the first quarter of
2003, and increased operating costs. The run rate of the first half of this
exceptional year will be a fair reflection of the performance of U.S.
Foodservice for 2003.
In South America, net sales increased mainly due to the consolidation of
Disco and Santa Isabel in April and July of 2002, respectively. Net sales
were adversely impacted by lower currency exchange rates of in particular
the Brazilian Real and the Chilean Peso. The average exchange rate of the
Brazilian Real and the Chilean Peso to the Euro decreased by 27% and 23%,
respectively, in the first half-year of 2003 compared to the same period
last year. Net sales in Brazil increased in local currency partly due to
new store openings at Bompreco.
Operating loss before goodwill and exceptional items in South America was
EUR8 million in the first half-year of 2003 compared to an operating income
of EUR32 million in the same period last year. The decline was primarily a
result of the consolidation of Disco and Santa Isabel in April and July of
2002, respectively, both of which had operating losses. Operating income
before goodwill and exceptional items in Brazil in the first half-year of
2003 was below the level for the same period of last year in local currency
as a result of higher labor costs. The operating results before goodwill
and exceptional items of the Other segment decreased by EUR86 million in the
first half-year of 2003 compared to the same period last year. This
partially reflected higher corporate costs of in total EUR55 million as a
result of higher legal, audit and other advisory expenses. Furthermore,
insurance costs increased compared to last year due to the release of an
excess loss provision in the first half-year of 2002. Real estate gains in
the first half-year of 2003 were also below the level realized in the first
half-year of 2002.
Goodwill amortization
Goodwill amortization in the first half-year of 2003 amounted to EUR90
million (same period last year: EUR144 million). Lower goodwill balances at
year-end 2002 resulting from the goodwill impairment charges recorded in
2002 and the lower average currency exchange rate of the US Dollar to the
Euro largely caused the decrease.
Goodwill impairment
No goodwill impairment charges were recorded in the first half-year of 2003
(same period last year: EUR88 million). The goodwill impairment charge
recorded in the first half-year of 2002 related to Disco Ahold International
Holdings N.V.
Exceptional items
No exceptional items were recorded in the first half-year of 2003. In the
same period last year an exceptional loss of EUR372 million was incurred
relating to the purchase of the additional shares in Disco Ahold
International Holdings N.V. in July and August 2002 at a price that exceeded
the fair value of the shares acquired by EUR367 million and the write-off of
a loan to Velox of EUR5 million.
Net financial expense
Net interest expense in the first half-year of 2003 increased by 5.8% to
EUR533 million (same period last year: EUR504 million), primarily caused by
banking fees and interest expenses related to the new facility signed on
March 3, 2003, new debt assumed or incurred in connection with acquisitions
in the course of 2002 and an increase in cash dividends paid in 2002. This
was partly offset by a favorable currency impact, especially of the U.S.
Dollar to the Euro. Net interest expense excluding currency impact
increased by 23%.
The gain on foreign exchange in the first half-year of 2003 amounted to
EUR20 million and mainly related to the positive impact of the revaluation
of the Argentine Peso on U.S. Dollar denominated debt in Argentina. In the
same period of 2002, there was a foreign exchange loss of EUR71 million
related to the devaluation of the Argentine Peso and inflation adjustment
losses related to Argentina.
Income taxes
The income tax rate, adjusted for the impact of goodwill and exceptional
items, increased to 42% in the first half-year of 2003 compared to 29% in
the same period last year. The main factor contributing to this increase of
the tax rate was a different mix of earnings from each country, and higher
losses in areas where no tax credit could be recorded.
Share in income (loss) of joint ventures and equity investees The share in
income (loss) of joint ventures and equity investees in the first half-year
of 2003 amounted to an income of EUR51 million compared to a net loss of
EUR69 million in the same period last year.
The loss of DAIH of EUR126 million in the first half-year of 2002 was mainly
caused by the negative impact of the devaluation of the Argentine Peso on
U.S. Dollar denominated debt as well as inflation adjustment losses on
third-party Argentine Peso debt in Argentina. DAIH, including Disco and
Santa Isabel, was fully consolidated in the first half-year of 2003.
Cash flow statement
Net cash from operating activities in the first half-year of 2003 amounted
to EUR678 million (same period last year: EUR1,316 million). Changes in
working capital resulted in a cash outflow of EUR102 million partly due to
shorter payment terms imposed by certain suppliers to U.S. Foodservice as a
consequence of the discovery of accounting irregularities as originally
announced on February 24, 2003.
Investments in tangible fixed and intangible assets in the first half-year
of 2003 amounted to EUR612 million (same period last year: EUR1,094
million). Divestments of tangible fixed and intangible assets amounted to
EUR260 million (same period last year: EUR110 million), in both periods
mainly as a result of sale and leaseback transactions in the U.S. and
Europe.
Shareholders' equity
Shareholders' equity, expressed as a percentage of the balance sheet total,
was 9.9% (at year-end 2002: 10.5%). Shareholders' equity at July 13, 2003,
was EUR2,319 million.
Debt position
The rolling interest coverage ratio at the end of the first half-year of
2003 amounted to 1.5 compared to 2.6 at the end of the same period last
year. The rolling net debt/EBITDA ratio amounted to 3.9 at the end of the
first-half year of 2003 compared to 2.9 at the end of the same period last
year.
U.S. GAAP reconciliation
The audited 2002 Annual Report on Form 20-F filed with the U.S. Securities
and Exchange Commission contains a U.S. GAAP reconciliation of net income
(loss) for 2002 and shareholders' equity as at year-end 2002. Ahold will
not provide a U.S. GAAP reconciliation on a quarterly basis in 2003 but will
do so in 2004.
In November 2002, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached consensus on Issue No. 02-16, Accounting for
Consideration Received from a Vendor by a Customer (Including a Reseller of
the Vendor's Products). Under the consensus, cash considerations received
from a vendor should be considered an adjustment to the price of the
vendor's products or services and, therefore, characterized as a reduction
of cost of sales when sold unless (1) the cash consideration represents a
reimbursement of a specific, incremental, identifiable cost incurred in
selling the vendor's products and therefore characterized as a reduction of
those costs or (2) the cash consideration represents a payment for assets or
services delivered to the vendor and therefore characterized as revenue.
The Company will adopt the provisions of EITF 02-16 for Dutch GAAP, as
permitted by the Guidelines for Annual Reporting in The Netherlands, in
2003. The Company has not yet determined the effect on the consolidated
financial statements as a result of the adoption of EITF 02-16.
Accounting principles
The accounting principles supplied have not changed compared to the
accounting principles as stated in the Ahold 2002 Annual Report, which was
published in English last month. The Dutch version of the annual report is
available as of Friday and has been posted on the Ahold website
(http://www.ahold.nl).
The data included in this press release are unaudited except for the balance
sheet items as per December 29, 2002.
To view full report and financials:
http://bankrupt.com/misc/Ahold_Half_Year_Results.pdf
CONTACT: KONINKLIJKE AHOLD
Corporate Communications
Phone: +31.75.659.5720
KONINKLIJKE AHOLD: Ratings Status of Pass-through Trusts Revised
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch status of its
'BB-' ratings on the A-1 and A-2 pass-through trust certificates issued by
Ahold Lease 2001-A Pass Through Trusts to positive from negative.
The revised CreditWatch status follows the revision of the CreditWatch
status of the ratings on Ahold Koninklijke N.V.'s (Ahold) to positive on
Nov. 7, 2003. The ratings on Ahold Lease 2001-A Pass Through Trusts are
dependent on the corporate credit rating on Ahold, which guarantees leases
that serve as the source of payment on the rated securities. The leases,
which are "bondable" triple-net, are on 46 properties that include
supermarkets and other retail stores, office buildings, warehouses, and
distribution centers in 13 states.
CREDITWATCH STATUS REVISED TO POSITIVE
Ahold Lease 2001-A Pass Through Trusts
Pass-thru trust certificates
Rating
Class To From
A-1 BB-/Watch Pos BB-/Watch Neg
A-2 BB-/Watch Pos BB-/Watch Neg
LAURUS N.V.: Cuts Prices at Edah, Super De Boer, Konmar Stores
--------------------------------------------------------------
Laurus N.V. decided to take these measures to further strengthen the market
position of its formats:
Edah
Edah will structurally lower the prices of more than 200 products, mainly
A-brand products, as from Monday, November 10 forthcoming. In addition,
five important meat products will be significantly lowered in price as from
24 November forthcoming.
Super De Boer and Konmar
At both the Super De Boer and Konmar formats, from Thursday November 6,
until Saturday November 8, again well over 200 products was structurally
lowered in price. Mainly A-brand products are involved.
Since the beginning of the so-called price battle, three weeks ago, Super De
Boer and Konmar have structurally lowered the prices of 1300 products.
These products experienced an average price reduction of 10%. Edah has
structurally lowered the price of 780 products. These products experienced
an average price reduction of 12%. Edah has been working on structural
price reductions of its A-brand assortment since August 2003. Even before
the price battle, a price reduction on 450 products and the entire meat
assortment had been realized.
ROYAL KPN: Records Revenue Growth, Strong Cashflow in Q3
--------------------------------------------------------
Following the successful execution of KPN's debt reduction strategy the
Board has decided to propose to start paying a cash dividend again to KPN's
shareholders. KPN intends to pay a cash dividend of EUR0.12 per share in
respect of the year ending December 2003. This proposed dividend will be
presented for approval at the Annual Shareholders Meeting due to be held on
April 15, 2004 and paid out shortly afterwards. It is the Board's intention
to offer no scrip alternative.
Key developments Q3
(a) Revenue growth core business 3.1% (Mobile 6.5%; Fixed 0.8%)
(excluding exceptional items)
(b) 398,000 net mobile customer additions, of which E-Plus
248,000, resulting in a total of 14.2 million mobile
customers
(c) Net addition i-mode customers of 188,000 resulting in a
total of 541,000
(d) 96,000 new ADSL connections, resulting in a total of 609,000
(e) Profit before tax of EUR451 million (Q3 2002: EUR241
million) (excluding exceptional items)
(f) EUR839 million free cash flow (Q3 2002: EUR1,096 million)
(net cash flow from operating activities after capex,
interest, tax and restructuring expenses)
(g) Net debt reduced to EUR9.4 billion (Q3 2002: EUR13.9
billion)
(h) Early redemption of bonds of EUR407 million and EUR50
million on the securitization program and in addition, in
October early redemptions of EUR671 million
(i) On November 7 KPN sold its 15% stake in Hutchison 3GUK for
GBP90 million
Commenting on the results, CEO Ad Scheepbouwer said: "I am pleased to
announce that KPN is returning to the ranks of cash dividend paying
companies. It is encouraging to see that we have been able to deliver
revenue growth across our core activities. I am especially satisfied with
the strong customer growth at E-Plus in Germany and the revenue increase
from our broadband activities in the fixed division in the Netherlands.
Moreover we have continued to achieve strong cash generation during the
quarter."
Highlights results third quarter 2003 (excluding exceptional items)
In the third quarter of 2003, KPN recorded a profit before taxes of EUR451
million (Q3 2002: EUR241 million). Net profit after taxes amounted to
EUR172 million, compared to a net profit of EUR38 million in the third
quarter of 2002. In the third quarter of 2003, total charges related to
exceptional items amounted to EUR33 million compared to a profit of EUR30
million in Q3 2002.
Furthermore, the operating revenues grew by EUR55 million, or 1.8% to
EUR3,082 million. The core segments of KPN (including their inter-company
revenues, excluding exceptional items) recorded a growth of EUR96 million
(3.1%) compared to the same period last year. Operating EBITDA grew by 129
million, or 11.3%, from EUR1,145 million in the third quarter of 2002 to
EUR1,274 million in the corresponding period of 2003.
To see full copy of financial results:
http://bankrupt.com/misc/KPN_Results.htm
===========
P O L A N D
===========
UPC POLSKA: Final Voting Ballots Expected November 24
-----------------------------------------------------
On October 30, 2003, the United States Bankruptcy Court for the
Southern District of New York entered an order approving UPC
Polska, Inc.'s First Amended Disclosure Statement with respect to the First
Amended Chapter 11 Plan of Reorganization Jointly
Proposed by UPC Polska, Inc. and UPC Polska Finance, Inc. in
connection with the Company's pending case filed on July 7, 2003
under Chapter 11 of the United States Bankruptcy Code (Case No.03-14358) and
authorizing the Company to begin soliciting votes for its proposed Chapter
11 plan of reorganization from creditors with impaired claims which would
receive distributions under such plan.
Holders of record of allowed claims against the Company as of
October 31, 2003 will be entitled to vote their claims with
respect to the Company's Chapter 11 plan of reorganization. The
Company expects to mail the approved disclosure statement and
related ballots on or before November 5, 2003. Final ballots for voting on
the Chapter 11 plan of reorganization are due by
5:00p.m. (New York City time) on November 24, 2003. The
confirmation hearing on the Chapter 11 plan of reorganization is
scheduled for December 3, 2003.
=========
S P A I N
=========
LYCOS EUROPE: Expects EUR100 Mln from Paid Services in 3-5 Years
----------------------------------------------------------------
With its move towards placing the focus on its core products and
implementing profit centers, LYCOS Europe, one of Europe's leading portal
providers, is launching a far-reaching program aimed at boosting its
competitiveness on the market. On this background, LYCOS Europe will be
focusing its development capacities on the product categories that have
enjoyed successful introduction -- including communication (e-mail,
messenger, SMS, MMS), communities (chat, dating), web hosting (Webcenter,
Tripod) and shopping & search. It will also be gearing them towards a
Europe-wide profit center structure. At the same time, the company is
reducing its product portfolio by low-margin niche services and bundling its
development centers.
With this restructuring move, LYCOS Europe is consistently pushing ahead
with its long-term objective of increasing revenues and improving results.
Within three to five years, with an overall sales quota of 30-40%, revenues
from paid services and shopping are set to rise to EUR100 million. As part
of the program, which will launch in January 2004, the number of employees
at LYCOS Europe will be reduced from its current level of 925 to a predicted
825.
The implementation of these measures will lead to cost-saving effects by a
two-digit-million-Euro amount in the forthcoming years. The restructuring
measures were developed in full agreement with the Supervisory Board, led by
the Chairman, Prof. Dr. Jurgen Richter, who has been involved since early on
in the Board's considerations and has accompanied the decision-making
process closely.
===========================
U N I T E D K I N G D O M
===========================
BRITISH AIRWAYS: Second Quarter Profit Dives More than 50%
----------------------------------------------------------
British Airways announced a pre-tax profit of GBP105 million (2002: GBP245
million) for the three months ended September 30, 2003. Yields in the
second quarter were down 5.9% (2002: 1.2% up). The three-month pre-tax
figures took the result for the half-year to GBP60 million profit (2002:
GBP310 million).
Operating profit for the quarter was GBP195 million (2002: GBP248 million).
The figure for the half-year was GBP235 million (2002: GBP406 million).
There will be no interim dividend.
Rod Eddington, British Airways' chief executive, said: "Despite a difficult
quarter, which included unofficial industrial action at Heathrow, the
results show that both our Future Size and Shape recovery program and other
business plan initiatives are helping to offset the continued deterioration
in revenue.
"We have made good progress in taking costs out of the business and have
delivered GBP701 million of annualized cost savings against a target of
GBP650 million. Manpower reductions are at 12,087 and on track to achieve
our 13,000 target by March 2004.
"However, in the soft revenue environment, we must do more to remove costs.
We will continue to simplify and modernize our business while enhancing the
customer experience with improved service and better airfares.
"New technology is key to simplifying processes for our customers and they
are embracing it enthusiastically. E-tickets are now used by nearly half
our customers and internet bookings on ba.com continue to increase with 46%
of all shorthaul non-premium point-to-point bookings being made on-line.
"Customers now also monitor and manage their reservations on-line. More
than 60% of our customers choose to communicate with us by email.
"On the ground and in the air we have world beating, award winning products.
We have more flat beds than any other airline -- nearly 6,000 on our
aircraft. In addition, we continue to open new airport lounges across our
network, refurbish existing ones and provide more customer self-service
options than ever before."
Lord Marshall, the airline's chairman, said: "Trading patterns seen over the
last few months point to a more stable outlook for revenue. The recent
positive economic news from the United States is a welcome development, but
is not yet showing in forward bookings. In the soft revenue environment,
continued delivery of business efficiency and cost improvement is core to
improving profitability."
Group turnover for the second quarter was nearly 6% down at GBP1,983 million
(2002: GBP2,104 million), on a flying program up by 1.7%, measured in
available ton kilometers (ATKs). Traffic volumes, measured in revenue
passenger kilometers (RPKs), were up 0.9%. Seat factor was down 0.2 points
at 76.5% on capacity 1.0% higher in available seat kilometers (ASKs).
Operating cashflow for the six months was GBP520 million (2002: GBP756
million).
After disposal proceeds, capital expenditure and interest, cash inflow was
GBP367 million (2002: GBP738 million).
Net debt was GBP4,807 million, down by GBP342 million since the start of the
year, its lowest level since June 1998.
Unit costs improved by 4.4% on the same period last year. This reflects a
net cost reduction of 2.8% on capacity 1.7% higher in ATKs.
Reductions were achieved in most categories of operating costs, including
selling costs (down 22.3%), engineering and other aircraft costs (down
11.3%). Fuel costs increased by 21.1% and employee costs increased by 1%.
November 10, 2003
KG/150 /03
Future Size and Shape achievements:
(a) Achieved GBP701 million of annualized cost savings against
March 2004 GBP650 million target.
(b) Achieved manpower cost savings of GBP437 million. Reduced
manpower equivalent by 12,087 since August 2001 -- on track
to achieve 13,000 March 2004.
(c) Achieved GBP148 million savings on sales and distribution
costs against GBP100 million target.
(d) Achieved GBP116 million savings on procurement against
GBP100 million target.
(e) Disposals of GBP694 million against March 2004 GBP900
million target.
(f) Hangars reduced by a third and engineering inventory and
spares reduced by GBP135 million.
(g) Introduced 46% of the lowest shorthaul leisure fares on 180
routes sold on line against 50% target.
(h) Achieved 44%usage of e-ticket instead of paper tickets.
(i) Made available 100% of Executive Club transactions on line.
(j) BA.com allows all customers to check bookings online.
(k) 60% of customers who book tickets communicate by email.
(l) Reduced fare types by 500,000 from 1.8 million to 1.3
million.
To see financial statements:
http://bankrupt.com/misc/British_Airways_Interim.htm
BRITISH AIRWAYS: Chairman Marshall to Step Down Next Year
---------------------------------------------------------
Lord Marshall of Knightsbridge has announced his intention to retire as
chairman of British Airways at the close of the company's next annual
general meeting on July 20, 2004.
He joined the company as chief executive in February, 1983, became chairman
and chief executive in 1993 and then part-time chairman in 1996.
Lord Marshall will be succeeded as chairman next July by Martin Broughton,
56, currently senior independent director. In preparation for this change,
the board of British Airways has appointed him deputy chairman, with
immediate effect. Martin Broughton, currently chairman of British American
Tobacco, joined the airline's Board in 2000 and chairs its audit committee,
as well as serving on the nominations, remuneration and safety review
committees.
At the same time, British Airways has appointed Alison Reed as a
non-executive director effective December 1, 2003. Mrs. Reed, 46, is group
finance director of Marks and Spencer plc and a non-executive board member
of HSBC Bank PLC.
BRITISH ENERGY: Posts New Common Codes and ISIN for Bonds
---------------------------------------------------------
Notice to Holders of the Guaranteed Bonds Issued by British Energy Plc
GBP134,586,000 6.202% Guaranteed Bonds due 2016
GBP163,444,000 6.077% Guaranteed Bonds due 2006
-and-
GBP109,861,000 5.949% Guaranteed Bonds due 2003:
BONDS EXISTING IDENTIFICATION CODES
(COMMON CODE/ISIN NOs)
GBP134,586,000 6.202%
Guaranteed Bonds due 2016 009857940/XS0098579401
GBP163,444,000 6.077%
Guaranteed Bonds due 2006 009858075/XS0098580755
GBP109,861,000 5.949%
Guaranteed Bonds due 2003 009858164/XS0098581647
issued by British Energy plc and each guaranteed by British Energy
Generation Limited and British Energy Generation (U.K.) Limited (being
together, the Guarantors)
British Energy announced on October 1, 2003 that it had agreed the terms of
a proposed restructuring of the British Energy group of companies with
certain of its creditors and the Secretary of State for Trade and Industry.
The Proposed
Restructuring gives effect to the heads of terms signed on 14 February 2003.
Completion of the Proposed Restructuring is subject, among other things, to
receipt by the Secretary of State of a satisfactory notification from the
European Commission that insofar as the proposals involve the grant of State
aid by the U.K. Government, such aid is compatible with the common market.
We understand that the Secretary of State expects to receive this
notification by mid 2004.
The terms of the Proposed Restructuring are set out in a restructuring
agreement entered into as of September 30, 2003 by certain Group companies,
Enron Capital & Trade Europe Finance LLC, Teesside Power Limited, Total Gas
& Power Limited, The Royal Bank of Scotland plc, British Nuclear Fuels plc
and certain holders of the outstanding Bonds (the Creditor Restructuring
Agreement). As of October 31, 2003, holders of 87.73% in the aggregate of
outstanding Bonds (each together, the Consenting Bondholders) were
signatories to the Creditor Restructuring Agreement and irrevocably agreed
to be bound by the terms of the Proposed Restructuring and to take all
actions required of them to implement the restructuring steps.
Under the terms of the Creditor Restructuring Agreement, a Consenting
Bondholder may sell to another Consenting Bondholder and may sell to a
Bondholder not party to the Creditor Restructuring Agreement provided that
it first obtains from that
Bondholder a written undertaking in favor of the other parties to the
Creditor Restructuring Agreement (in the form attached as Schedule 11
thereto) agreeing to be bound by the terms of the Creditor Restructuring
Agreement as if such person were a Consenting Bondholder.
Each series of Bonds is currently represented by a Global Bond deposited
with a common depositary for Euroclear Bank SA/N.V. as operator of the
Euroclear System and Clearstream Banking, societe anonyme, Luxembourg (each
together, the Clearing Systems).
So that it may be possible to identify easily those Bonds in the Clearing
Systems which are subject to the Creditor Restructuring Agreement (the
Assenting Bonds) during the period ending on the earlier of the date upon
which the Creditor Restructuring Agreement is terminated in accordance with
its terms or the date upon which each of the conditions to the Proposed
Restructuring have been satisfied or waived, it has been proposed that each
series of Assenting Bonds will be identified in the Clearing Systems with a
New Common Code and New ISIN, as:
Series New ISIN New Common Code
2016 Bonds XS0180470808 018047080
2006 Bonds XS0180469461 018046946
2003 Bonds XS0180470121 018047012
British Energy has agreed to this proposal. The New Identification Codes
will be available to be used in the Clearing Systems from such date as the
Clearing Systems receive written confirmation from British Energy that the
Creditor Restructuring Agreement has become effective among the parties to
it. The New Identification Codes will not be applied to individual
Assenting Bonds until such time as the Clearing Systems have received an
Electronic Communication (as described below) in relation to those Assenting
Bonds from a Consenting Bondholder and/or their Custodian, which is
satisfactory to the Clearing Systems.
Should a Consenting Bondholder or any other Bondholder wish to receive more
details as to how to obtain New Identification Codes in respect of their
Bonds or how to send the required Electronic Communication to the Clearing
Systems, then that party should contact the legal and financial advisers to
the Ad Hoc Committee of Bondholders, Cadwalader, Wickersham & Taft LLP and
Close Brothers Corporate Finance Limited ('Close Brothers') respectively.
Cadwalader and Close Brothers represent the Ad Hoc Committee of Bondholders
in the Proposed Restructuring and not any other party, including any other
Bondholder or Consenting Bondholder.
The existing Common Codes and ISINs applicable to the Bonds will continue to
apply in parallel with the New Identification Codes in relation to Bonds,
which are not Assenting Bonds.
Holders of the Bonds who have not yet signed the Creditor Restructuring
Agreement or who wish to receive more information relating to the New
Identification Codes or Electronic Communication referred to herein are
asked to contact Cadwalader and/or Close Brothers in response to this
Notice, and to direct all queries to them. Holders of the Bonds are kindly
asked not to contact either British Energy, or any of its own advisers, as a
result of the publication of this Notice.
The contact details for the Ad Hoc Committee's advisers are:
Justin Bickle or Stephen Phillips
Cadwalader, Wickersham & Taft LLP
265 Strand
London WC2R 1BH
Phone: +44 (0) 20 7170 8621
E-mail: justin.bickle@cwt-uk.com
stephen.phillips@cwt-uk.com
Martin Gudgeon or John Nener
Close Brothers Corporate Finance
10 Crown Place
London EC2A 4FT
Phone: +44 (0) 20 7655 3172
Email: martin.gudgeon@cbcf.com
john.nener@cbcf.com
CABLE & WIRELESS: Conclusion of U.S. Arm Sale Within Weeks
----------------------------------------------------------
Talks regarding the sale of the loss-making U.S. arm of telecoms company
Cable & Wireless are already in the final stages, according to the Financial
Times.
The transaction is designed as a "pre-packaged bankruptcy," people close to
the talks said. The deal will see Cable & Wireless selling the troubled
operation to a new owner after subjecting it to Chapter 11 bankruptcy
protection.
Interested parties, left after IBM pulled out from possible acquisition of
parts of the U.S. division, include Level 3, the U.S. telecoms operator; and
several web-hosting companies and private equity groups. They might bid for
the whole of the business, although there is still a chance that Cable &
Wireless will hold on to all but one portion of the U.S. arm, the report
said. The telecoms company could sell only either the web-hosting business
or the telecoms network.
C&W said: "The company is in the process of reviewing the options for the
U.S. business and will update investors when there is something to
announce."
According to the report, a deal could be announced in the next few weeks,
although it is still unclear whether that means ahead of its interim
results. Blackstone, the U.S.-based private equity group that is understood
to be advising C&W on the sale, declined to comment, the report said.
CENARGO INTERNATIONAL: Administrators, Lenders Reach Rescue Deal
----------------------------------------------------------------
A debt-for-equity swap has been arranged between Cenargo, currently under
administration, and its creditors, according to the Daily Post. The deal is
expected to safeguard 400 jobs, and secure the company's daily sailings
between Twelve Quays in Birkenhead and Dublin and Belfast. Cenargo operates
ferry services between Mersey, Dublin and Belfast.
Accountants Ernst & Young, which arranged the rescue deal and Michael
Rollings, who acted as a joint administrator, said: "I am delighted that the
business has been restructured."
Joint administrator Michael Rollings said he now expected the firm would
exit from administration on December 12, according to the report. Cenargo
will adopt the name Norse Merchant, its trading name on its Irish Sea
services, after it emerge from administration.
Phil Shepherd, managing director of the flagship Irish Sea operations for
Norse Merchant said: "Trading has not only remained stable but even improved
throughout the administration process."
Financial problems at Norse Merchant's American parent company weighed down
on the firm, forcing creditors who were owed US$175 million to take control.
GOSHAWK INSURANCE: Shuffles Board Due to Syndicate 102 Run-off
--------------------------------------------------------------
Goshawk Insurance Holdings plc announces a new management team as part of
its operational review announced on July 3, 2003.
Chris Fagan has stepped down as Group Chief Executive and resigned as a
director with immediate effect. Having built a strong underwriting and
management team in Bermuda and following the decision to put Syndicate 102
into run off there is no longer a significant role for him in the Group. He
leaves with the thanks and best wishes of the board.
Andrew Gammell, Goshawk's Group Underwriting Director, will step down from
the Board at the end of the year and will remain available to assist in the
run-off process for Syndicate 102. The board would like to record its
thanks to Mr. Gammell for his work in building Goshawk.
Russell Brooke the Chief Executive and Chief Underwriting Officer for
Goshawk Re, the Group's Bermudan business, has been appointed to the board
with immediate effect. Mr. Brooke has exceptional experience within the
underwriting industry and an excellent reputation from his time at ACE
Tempest Re.
Andrew Castell will remain as Goshawk's Group Finance Director and, in
addition to this existing responsibility, will oversee the day-to-day
management of Goshawk's London operations.
Paul Spencer will become part-time Executive Chairman, with both Russell and
Andrew reporting directly to him.
As announced on October 31, 2003, Syndicate 102 has been put into run-off
and we continue to work with Lloyd's and the Financial Services Authority to
ensure a smooth handover.
Goshawk will focus on its reinsurance operation in Bermuda, Goshawk Re.
Russell Brooke and his team intend to focus Goshawk Re in the areas of their
reinsurance expertise, which they believe has significant potential. In the
six months ended
June 30, 2003, Goshawk Re achieved an operating profit of GBP14.2 million.
Paul Spencer, Chairman, commented: "These changes provide Goshawk with an
experienced and motivated new team to drive it forward and maximize
shareholder value."
CONTACT: GOSHAWK INSURANCE HOLDINGS PLC
Paul Spencer, Chairman
Phone: 020 7621 0777
COLLEGE HILL ASSOCIATES
James Henderson
Phone: 020 7457 2020
GOVETT SECURITIES: Hires Gartmore as New Investment Manager
-----------------------------------------------------------
The Board of Govett Securities & Investments Limited announces that they
have agreed in principle to appoint Gartmore Secretaries (Jersey) Limited as
Manager to the Company, with Gartmore Investment Limited as Investment
Manager.
This follows the announcement by Allied Irish Bank, plc of the intended sale
of certain of the management contracts of Govett Investment Management
Limited to Gartmore Investment Management Plc.
The appointment of Gartmore will be subject to settlement of the terms of
novation of the investment management contract and certain other
administrative matters and the consent of the Jersey Financial Services
Commission.
The Board is consulting with its advisers and Gartmore and will be writing
to shareholders shortly.
*****
Govett was purchased by Allied Irish Banks Investment Managers in 1995,
primarily as a Far East/emerging markets asset management specialist, and it
contributed satisfactorily to Group profits for several years. Recently,
however, Allied Irish Banks said, "changed market conditions, notably the
Asian crisis of 1997/1998, fundamentally impaired the business and led to a
significant reduction in funds under management."
"Despite substantial restructuring and some significant investment
performance across Govett's range of products the business lacks the scale
required for a U.K. based asset management operation and it will not return
to profitability in the near future."
HIBERNIA FOODS: Administrator Receives At Least 50 Tenders
----------------------------------------------------------
More than 50 companies are interested in acquiring the whole or part of
troubled Hibernia Foods, according to Evening Gazette.
A spokesman for administrators KPMG said: "The phenomenal response has been
very encouraging and underlines that there are strong businesses within the
company. The business is continuing to trade and we are looking to sell it
whole or in parts as appropriate."
The wave of interest gave the administrators confidence that they will be
able to dispose the business which went into administration last month. The
downturn in the ready-food market and the loss of a major contract also
claimed Dublin-based Hibernia Foods Plc.
A deal means the rescue of more than 1,000 jobs in Teesside, where it has
about half of its business. Hibernia Foods employs a total of 693 staff in
its two sites in Hartlepool, and 400 in Stockton. The company has 2,000
workers across six sites nationwide. Among the company's products are Sara
Lee desserts and Mr. Brain's faggots.
INVENSYS PLC: To Detail Plan for Powerware Business Soon
--------------------------------------------------------
Invensys plc is expected to send out information regarding the sale of its
power supply unit, Powerware, this week, The Business said, according to
AFX.
The debt-ridden engineering company is currently disposing assets to "secure
a greater level of financial stability" for the group. It has to plug a
GBP900 million- pension deficit and take care of GBP1.6 billion in debts due
to be refinanced in 2005.
In line with the decision, it recently agreed to divest its Metering
business to IMS Meters Holdings for a gross cash consideration of US$650
million (GBP388 million). The Powerware business, which makes power systems
for businesses and hospitals, is valued at up to EUR600 million by analysts.
It had total sales of EUR758 million last year. Schneider Electric is seen
as a likely bidder, the paper said.
LEEDS UNITED: Pressures Creditors to Take Debt Haircut
------------------------------------------------------
Leeds United deputy chairman, Allan Leighton, has threatened to call in
administrators if bondholders of the troubled soccer club refuse his debt
workout plan. Mr. Leighton, along with business partners, is offering to
inject GBP4.4 million into club, but he wants bondholders to "take a
haircut" on the terms of their loans, according to The Observer.
"If they do not agree, Mr. Leighton has told friends he will have no
hesitation in calling in the administrators in what would be the biggest
casualty in the game's ongoing financial crisis," The Observer said.
Bondholders are collectively owed GBP79 million, says the paper, and Mr.
Leighton reportedly wants them to cut interest and extend the terms of their
loans.
SSL INTERNATIONAL: Receives Three Bids for Medical Unit
-------------------------------------------------------
Three private equity groups are interested in buying the medical division of
Durex condom-maker SSL International, The Business said, according to AFX.
The potential buyers are Morgan Stanley Capital Partners, 3i Group PLC and
Apax Partners. They presented bids worth between GBP200 million to GBP230
million, the report said.
SSL International put the unit for sale in April to focus on the group's
consumer healthcare division. The decision came after several years of
underperformance by the company's shares, which were badly hit by an
accounting scandal. The unit holds the profitable Regent Biogel business,
which makes surgical gloves, the hospital antiseptic brand, Hibi, and a wide
range of wound management products. Analysts expect the business to fetch
up to GBP275 million.
WEMBLEY PLC: Rebel Shareholders Want Executive Chairman Replaced
----------------------------------------------------------------
Major investors are calling on U.K.-based Wembley Plc to kick out its
Executive Chairman Claes Hultman from the gaming company, Telegraph says,
according to Bloomberg.
The group, headed by Anthony Bolton of Fidelity and Andy Brough of Schroders
Plc, wants to put a new chief executive in place of Mr. Hultman, whom they
say lacked experience.
According to the report, the group is also worried Mr. Hultman may be
distracted by having to appear as a witness in the Lincoln Park bribery
trial. The case relating to a bribery plot at Wembley's Lincoln Park
racetrack and casino in Rhode Island could cost the company US$4.5 million.
The renegade group could propose to replace Mr. Hultman as non-executive
chairman with Neil Chisman, a Webley non-executive. Mr. Hultman's
replacement may prompt a takeover bid, the report said.
Fidelity and Schroders, which together control about 25% of Wembley,
according to Bloomberg figures, are joined by California Public Employees'
Retirement System and the Ontario Teachers' Pension Plan. The latter group
together controls about 20% of Wembley through holdings in the Active Value
investment fund.
This faction also wants to oust finance director Mark Elliott, according to
the report. They recently questioned the decision of the U.S. Attorney's
Office to grant Mr. Elliott immunity from prosecution in the bribery
scandal.
WEMBLEY PLC: Company Profile
----------------------------
NAME: Wembley Plc
PHONE: +44 (0) 20 8902 8833
FAX: +44 (0) 20 8900 1046
E-MAIL: corporate@wembleyplc.com
WEBSITE: http://www.wembley.co.uk
TYPE OF BUSINESS: Wembley plc is a leading track-based gaming company
operating in the U.K. and U.S.A. Wembley owns racetracks and operates
adjoining facilities containing video slot machines. The company has five
tracks in the U.S. (located in Rhode Island and Colorado) and six in the
U.K. Wembley owned London's Wembley Stadium complex, which it sold in 2002.
SIC: Leisure and Gaming Industry
COMPANY LOCATION: Elvin House
Stadium Way
Wembley HA9 0DW
United Kingdom
EXECUTIVES: Claes Hultman, Executive Chairman and Acting Chief
Executive
Mark Elliott, Finance Director
Neil Chisman, Non-Executive Director
Peter Harris, Non-Executive Director
THE TROUBLE: Wembley plc stands to pay US$11 million -- $500,000 for each of
the 22 indictments issued by a Rhode Island district court -- in relation to
bribery charges brought against it. It could also lose its license to
operate Lincoln Park.
Its hope to start a new venture in Colorado was dashed recently after voters
in the U.S. state rejected plans to run a new video-based lottery through
racetracks.
To see financial results:
http://bankrupt.com/misc/Wembley_Plc_Interim_Results.htm
FINANCIAL ADVISOR: Hawkpoint Partners
4 Great St. Helen's
London EC3A 6HA
BANKERS: Barclays Bank plc
London Corporate Banking
50 Pall Mall
PO Box No. 15162
London SW1 1QB
AUDITOR: Ernst & Young LLP
Registered Auditor
Becket House
1 Larnbeth Palacee Road
London SE1 7EU
*********
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
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