/raid1/www/Hosts/bankrupt/TCREUR_Public/031118.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
Tuesday, November 18, 2003, Vol. 4, No. 228
Headlines
F I N L A N D
SANITEC INTERNATIONAL: Fitch Assigns 'CCC+' Rating to 2012 Notes
F R A N C E
BRICOUT ET DELBECK: Court Okays Plan to Ship Assets to Rivals
CANAL PLUS: Vivendi Nears Deal on Belgian Divestments
SCOR SA: Postpones Approval of Rescue Plan Until December 1
G E R M A N Y
ALLIANZ GROUP: In Black for Second Consecutive Quarter
DEAG AG: Main Shareholders Back Share Issue to Repay Debt
DRESDNER BANK: Records EUR433 Mln Pre-tax Loss in First 9 Months
GAUSS INTERPRISE: Cuts Revenue Forecast by More than 50%
WCM GROUP: Chairman Underscores Need to Focus on Core Operations
I R E L A N D
ELAN CORPORATION: Tender Offer for LYONs Due 2018 Ongoing
HIBERGEN: Funding-raising Fails; Board Decides to Close Shop
L U X E M B O U R G
MILLICOM INTERNATIONAL: Assigned 'B+' Long-term Credit Rating
N E T H E R L A N D S
BUHRMANN N.V.: Obtains New EUR880 Million Credit Facility
BUHRMANN N.V.: Seals Bond Offering to Institutional Investors
KAPPA BEHEER: Fitch Assigns 'B' Rating to Senior Notes
KONINKLIJKE AHOLD: Carrefour Takes over Two Polish Hypermarkets
N O R W A Y
PETROLEUM GEO-SERVICES: Ratings Withdrawn after Chapter 11 Exit
S W I T Z E R L A N D
4M TECHNOLOGIES: Third Quarter Operations Break Even
U N I T E D K I N G D O M
BRITAX GROUP: On CreditWatch Due to Uncertain Trading Prospects
BRITISH ENERGY: Clarifies Recent Statement on Power Reserves
EURODIS ELECTRON: Rogers Appointed Non-executive Chairman
HIBERNIA FOODS: Sale Could Come Before Christmas, Says Receiver
IMPERIAL CHEMICAL: S&P Keeps Debt Ratings Unchanged
NTL INC.: Third-quarter Net Loss Slips 68.2% to GBP117.3 Million
PACE MICRO: Appoints David Brocksom Finance Director
QUEENS MOAT: Sells Liverpool Moat House for GBP20 Million
SP HOLDINGS: New Strategy to Bear First-half Profit Next Year
THOMAS COOK: German Owner Assures Full Backing Despite Losses
WATERFORD WEDGWOOD: Junks Dividend; Cites EUR12 Mln Pre-tax Loss
WATERFORD WEDGWOOD: Turns to Capital Markets to Repay Debt
WATERFORD WEDGWOOD: Assigned 'B+' Ratings; Outlook Stable
* Large Companies with Insolvent Balance Sheets
*********
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F I N L A N D
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SANITEC INTERNATIONAL: Fitch Assigns 'CCC+' Rating to 2012 Notes
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Fitch Ratings assigned a 'CCC+' rating to Sanitec International S.A.'s
EUR260 million 9% Senior Notes (the Notes) due 2012. The agency also
assigned a Senior Unsecured rating of 'B-' to Sanitec Oy (the Company) and a
rating of 'B+' to its Senior Secured facilities. The Short-term rating is
'B'. The rating Outlook is Negative.
While sales and EBITDA for H1 2003 are only marginally behind the same
period last year, the Negative Outlook reflects the agency's principal
concern that a liquidity crisis may be looming. Against the backdrop of
increasingly challenging scheduled amortization payments under the Senior
Secured facilities, the Company has limited cash and other liquid resources,
and drawings under the revolving credit facility may be restricted by the
tightening of the leverage covenants required by the Senior Secured
facilities.
The three notch differential between the 'CCC+' rating assigned to the
Senior Notes and the 'B+' rating assigned to the Senior Secured facilities
reflects the agency's view on the significantly reduced recovery prospects
for Senior Noteholders compared with the Senior Secured lending group in the
event of any future forced restructuring or distress scenario. The Notes
will be effectively subordinated to all indebtedness of Sanitec and its
subsidiaries. The agency believes that recoveries would be severely
restricted, notwithstanding the shorter-than-average 120-day standstill
period and the requirement for Senior Secured lenders to achieve the "best
price" in the event of realization of security. The structural
subordination of the Notes relative to other classes of creditor, including
trade creditors at operating company levels, and the lack of credit support
for the Noteholders also support this view.
The Notes were issued in May 2002 to refinance EUR245 million of junior debt
that was issued in June 2001 as part of the financing package for the
EUR1,260 million public to private transaction of Sanitec led by BC
Partners. In addition to the second secured junior debt, the transaction
was financed by EUR555m of Senior Secured facilities, which include a EUR50
million revolving credit facility, undrawn as at June 30, 2003, and EUR510
million of equity and equity-like contributions.
The Senior Unsecured rating of 'B-' reflects Sanitec's leading position as a
manufacturer and supplier of bathroom ceramics and bath and shower products
in Europe. Despite the Company's strong regional brands and market shares,
its rating is constrained by its high financial leverage and its current
inability to generate positive free cash flow. Overall demand for Sanitec's
products remains subdued and whilst management has delivered EBITDA margin
improvements in spite of weak operating conditions, ongoing restructuring
cash costs, significant working capital outflows and the stepping-up of
scheduled amortisation payments under the Senior Secured facilities will
continue to exert considerable strain on an already stressed cash flow.
Sanitec is Europe's leading manufacturer of bathroom ceramics and bath and
shower products. Headquartered in Finland, the Company generated net
revenue of EUR 985.4 million and EBITDA of EUR147.6 million in FY02.
These ratings were initiated by Fitch as a service to users of its ratings
and are based on public information.
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F R A N C E
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BRICOUT ET DELBECK: Court Okays Plan to Ship Assets to Rivals
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An appeals court ruled in favor of saving most of the jobs in insolvent
Champagne-maker, Bricout et Delbeck, in the northern town of Reims,
according to just-drinks.com.
The decision averted a costly demonstration by the company's workers who
threatened to destroy 6 million bottles of Champagne and another 800,000
bottles of the unfinished product, worth around EUR50 million (US$58
million) if the court upholds an opposition issued by Bricout's former chief
executive, Pierre Martin. Mr. Martin raised the objection saying two of his
property companies have been wrongfully included in the plan.
The workers previously made a symbolic emptying of 3 hectoliters of
Champagne down the drain at the company's base at Tours- sur-Marne. They
put barricades but removed them after the approval of the plan. The
transfer of the company's assets to other French Champagne houses Moet et
Chandon and Vranken-Pommery will now go ahead, saving around 90 of the 130
jobs previously under threat.
Mr. Martin is under formal investigation for fraud and abuse of trust
following the discovery of a black hole in the company's accounts.
CANAL PLUS: Vivendi Nears Deal on Belgian Divestments
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Vivendi Universal is at the final stage of selling its pay-television
affiliate, Canal Plus, in Flanders, Belgium, Le Soir reports, according to
Intesatrade. It already received approval from the Belgian competition
authority for the disposal of the asset to Belgian cable company, Telenet
N.V. This was with the condition that Telenet allow competitors access to
the network, and it must not impose its decoder technology on the network,
the report said.
Vivendi Universal could also strike a deal regarding the sale of its Canal
Plus affiliate in the French-speaking region Wallonia to media company
Deficom Group N.V. in the next few weeks.
Canal Plus Group's had revenues of EUR969 million in the third quarter, down
from EUR1,167 million last year. Vivendi Universal expects the pay-TV unit
to make a profit this year, although not as much as the first-quarter levels
when exceptional items boosted results.
SCOR SA: Postpones Approval of Rescue Plan Until December 1
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Troubled French reinsurer Scor moved its extraordinary shareholders' meeting
to approve a company rescue plan from November 27 to December 1. The
postponement was caused by the failure of Balo -- France's official
distributor of corporate disclosures -- to print the notice for the meeting,
a spokeswoman said.
The meeting will seek shareholders' approval for a EUR600 million capital
increase to strengthen the Group's solvency and allow it to pursue its
existing underwriting policy.
"The capital increase will allow SCOR Group to forge ahead with its
strategy, which is to be a mid-sized reinsurer with global ambitions,
operating selectively in all reinsurance classes, pursuing a profit-driven
underwriting policy, providing value-added services, and having opted for a
policy of conservative asset management, in order to offer its customers the
level of security they expect it to provide," the company said recently.
Fitch Ratings placed SCOR Group's 'BBB' Insurer Financial Strength rating on
Rating Watch Negative, following the announcement of the company's 2003
third quarter results, which included significant reserve strengthening.
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G E R M A N Y
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ALLIANZ GROUP: In Black for Second Consecutive Quarter
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The Allianz Group succeeded in continuing the positive trend in operating
business during the third quarter and achieved a profit amounting to EUR372
million. The first nine months of fiscal year 2003 closed with the positive
result of EUR421 million.
"Our 3 Plus 1 Program is paying off more and more. We anticipate that the
positive trend in operating business will continue until the close of the
fiscal year," commented Helmut Perlet, responsible for controlling on the
Allianz Board of Management. "It is likely that we will also be able to
report the proceeds arising from the sale of the stake in Beiersdorf already
during the fourth quarter. We will continue to drive restructuring forward
at full speed and force the pace of reducing risk-weighted assets at
Dresdner Bank. That shows: We are gaining momentum and are back on track
for profitability."
Expense ratio significantly reduced
The expense ratio was significantly reduced in all areas of business. The
combined ratio in Property and Casualty was 96.9% on September 30, 2003.
Premium growth continues to be strong in Life and Health at 13.3% (adjusted
for currency effects and consolidation).
Turnaround programs
The turnaround programs at Dresdner Bank, Allianz Global Risks, AGF und
Fireman's Fund made good progress. Banking showed a significant improvement
in operating result from minus EUR1.5 billion (after the first nine months
of 2002) to minus EUR69 million. Loan-loss provisions were eased back
significantly. Risk-weighted assets came down at Dresdner Bank -- primarily
as a result of the successful activity of the Institutional Restructuring
Unit -- from EUR142.8 billion at the start of the year to EUR121.9 billion.
Write-downs on investments available for sale at the Group again totaled
EUR0.7 billion in the third quarter. This contrasted with write-ups
amounting to EUR0.5 billion on securities written down in previous
accounting periods. The balance of write-ups/write-downs was -EUR2.3
billion in the first nine months.
Gross premium income in insurance business
Total gross premium income in insurance business went up during the first
nine months of 2003 (compared with the equivalent period for 2002) by 4.5%
to EUR64.2 billion. Exchange rate effects amounting to EUR3.1 billion
impacted negatively on premium income. Adjusted for exchange rate effects
and consolidation, premium income demonstrated growth of 9.1%.
Property and Casualty
Premium income in Property and Casualty rose by EUR0.6 billion to EUR34.2
billion compared with the equivalent year-earlier period. Growth was
generated primarily in Europe -- in particular Germany, France and Spain.
Adjusted for consolidation and exchange rate effects, premium income
increased by 5.2%.
The claims ratio improved by 7.6 percentage points to 71.7% compared with
the equivalent period for 2002. Restructuring undertaken on the portfolios
in France and the USA, the reduction in claims arising from natural forces,
and the more favorable situation for major claims contributed to this
result. The expense ratio fell from 27.4 to 25.2%. The combined ratio
continued to improve and was 96.9% after the first nine months of 2003.
Significant progress was made in all turnaround cases. The combined ratio
in ongoing business at Fireman's Fund was 92.0%. At Allianz Global Risks,
i.e. business with international industrial customers, the ratio of claims
and expenses to premiums earned was improved since the start of the year
from 126.3 to 94.5%. French AGF Group achieved a combined ratio of 103.5%
in the P/C business, coming very close to the goal of 103% for the year.
After amortization of goodwill, taxes and minority interests, earnings in
Property and Casualty came to EUR1.3 billion.
Life and Health
The Allianz Group succeeded in continuing growth in Life and Health, and
after adjustment for consolidation and exchange rate effects, total sales
increased by 13.3% to EUR30.6 billion. 51.9% of this figure originated from
unit-linked life insurance and other investment oriented products. Premium
income in the IFRS account increased by 0.3% to EUR14.7 billion.
In Germany, Allianz continued to benefit from the Group's financial
strength. Allianz Leben succeeded in expanding new business during the
first nine months by 16.4% to EUR2.2 billion. Sustained strong growth was
also posted in Italy and the U.S. (in the national currency). In order to c
ounteract the effects of the decrease in interest rates, Allianz Life
temporarily suspended sales of certain products, lowered the profit share
and reduced commissions in the U.S.
Consistent cost management was reflected in the improvement in expense ratio
from 19.5 to 16.7%. Investment income went up slightly from EUR6.2 billion
to EUR6.5 billion, fuelled by the recovery in the capital markets. After
amortization of goodwill, taxes and minority interests, earnings of EUR254
million were achieved in the Life and Health segment in the first nine
months.
Banking
Banking was largely determined by performance of Dresdner Bank, and
operating revenues went down. The total of net interest income and net fee
and commission income together with net trading income was at EUR5.2
billion, 9.1% below the value for 2002. The reduction in interest income is
principally due to deconsolidation of Deutsche Hyp and the strategic
reduction of the loan portfolio. Net fee and commission income at EUR172
million fell back moderately against the background of a sustained difficult
situation in the capital markets. By contrast, net trading income nearly
doubled.
Administrative expenses were reduced by 16.0% to EUR4.6 billion by
comparison with the equivalent period for the previous year. This furnishes
evidence that the measures implemented in the extensive restructuring
program at the bank are taking effect. The operating cost-income ratio fell
from 94.8 to 87.7%. Expenditure on loan-loss provisions came down from
EUR1.8 billion to EUR715 million. The banking segment concluded overall
with an operating loss of EUR69 million (following on from -EUR1.5 billion
in the comparable previous period).
After amortization of goodwill, taxes and minority interests, banking posted
a negative contribution to earnings amounting to EUR454 million.
Asset Management
Operating profit in the Asset Management segment amounted to EUR528 million
and was significantly above the year-earlier figure of EUR369 million.
Enhanced cost management contributed toward improving the cost-income ratio
from 79.0% in the third quarter of 2002 to 68.2%. A loss of EUR226 million
resulted for the first nine months of the year after deducting loyalty and
retention payments for the management and employees of the PIMCO Group and
Nicholas Applegate, amortization of goodwill, taxes and minority interests.
After-tax earnings of the asset management business will be negatively
impacted by a modification of the accounting treatment, which Allianz has
undertaken in agreement with its auditors, KPMG, concerning the deferred
acquisition of certain interests held by PIMCO management. To date,
elements of the purchase have been treated as acquisition cost, and from now
on it will be accounted for in accordance with Financial Accounting Standard
FAS 123. For the years 2000, 2001, and 2002 this will result in a non-cash
retroactive after tax adjustment in the amount of EUR112 million in total.
The expense after tax for the first nine months of fiscal 2003 was charged
pro rata to Allianz' results for the first nine months in the amount of
EUR80 million. In future years it is expected that this non-cash charge
will be equivalent to a reduction of future goodwill.
Assets under Management at the Allianz Group increased to EUR1,016 billion
by September 30, 2003. Compared with the year-end figure for 2002 this
represents an increase of EUR27 billion. Compared to year-end 2002, the
Group's own investments underwent a slight increase by EUR11 billion to
EUR414 billion. Investments for third parties also increased by EUR10
billion to EUR571 billion.
Positive trend in operating business
The earnings of the Allianz Group in the fourth quarter 2003 are likely to
be shaped by these developments:
The positive trend in operating business looks set to continue, leading to
further sustained improvements by comparison with the previous year.
Assuming that there will be no excessive burdens resulting from natural
catastrophes or major claims before the end of 2003, the combined ratio for
the entire year should remain below 98%.
A retroactive change in tax treatment for losses and write-downs on funds
for life and health insurers could lead to additional charges. On the basis
of current decisions, this would lead to an additional tax expense in the
order of around EUR600 million. It will probably not be possible to
compensate for the full amount of this expense by taking other measures. In
this case, a net charge in the order of EUR150 million should be anticipated
for consolidated earnings in the fourth quarter of 2003.
A further accelerated reduction in risk-weighted assets from the
non-strategic portfolio at Dresdner Bank (Institutional Restructuring Unit)
could trigger additional charges that may lead to the bank posting a
negative operating result for the entire year. Substantial reductions in
costs mean that ongoing business areas look set to close with a profit.
The sale of the Beiersdorf shareholding is likely to be effective already in
the fourth quarter.
Against this background, Allianz expects a clear positive result for the
entire fiscal year 2003.
DEAG AG: Main Shareholders Back Share Issue to Repay Debt
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DEAG Deutsche Entertainment AG (SIN 551390), the Auric Group, Krefeld, KTG
Technologie Beteiligungsgesellschaft mbH & Co. KG, Hannover, and DEAG's CEO
and largest shareholder Peter Schwenkow agreed on Friday to back the capital
measures announced by the company. This agreement forms part of an
extensive package of measures aimed at clearing DEAG's debts by year's end.
The capital measures consist of a combined rights offer to all shareholders.
At a ratio of two to one they will be able to buy new shares and stock
warrants from November 19, 2003 to mid-day December 3, 2003. In all,
4,583,350 shares will be on offer at a subscription price of EUR2.33 each.
The stock warrants will consist of 4,583,350 bonds, each with a nominal
value of EUR1.48. They will entitle holders to convert them into individual
DEAG bearer shares, each with a nominal value of EUR1.00. The warrants are
zero bonds with 16% calculated annual interest on the issue price and are
due for redemption in
2006.
As part of the capital measures, the consortium of investors will, subject
to certain conditions, guarantee DEAG an injection of funds amounting to
EUR10.2 million, or 65% of the sum total of capital measures.
In addition to the undertakings given by the above-mentioned investors,
further, non-binding expressions of interest in subscribing to the issue
have been received from investors in Germany and abroad. It is also planned
that stock warrant rights which have not been exercised will be taken up in
full as part of the capital increase until such time as the Auric Group's
participation reaches 21.9% of the increased capital stock. Shares not
acquired as part of the rights offer will then be offered for public
subscription.
Issuer's information/explanatory remarks concerning this
ad-hoc-announcement:
The EUR15.3 million that DEAG will raise if these capital measures are a
total success will serve to repay the company's debts. DEAG's banks and its
major shareholder Peter Schwenkow have agreed to waive claims totaling
EUR11.8 million. The remaining EUR13.5 million that is owed to
participating banks is to be repaid in full from the liquidity inflow, which
will also strengthen DEAG's equity base with lasting effect.
Berlin, November 14, 2003
This ad-hoc announcement can be downloaded from the DEAG News Archive at
http://www.deag.de/ir
DRESDNER BANK: Records EUR433 Mln Pre-tax Loss in First 9 Months
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Dresdner Bank's results for the first nine months of the current fiscal year
demonstrate the effectiveness of the measures implemented to date. Dresdner
Bank significantly reduced its net loan loss provisions and administrative
expenses year-on-year. Overall, the Bank was able to improve its result by
a substantial EUR1.7 billion. After the first nine months of the year, it
generated an operating loss of EUR70 million.
Operating result for strategic business: EUR768 million
The Bank's three strategic business units recorded an operating result of
EUR768 million, or EUR313 million net of Corporate Items. This was offset
by a nine-month operating loss of EUR383 million for its non-strategic
operations, which are bundled in the Institutional Restructuring Unit (IRU).
Since the start of the year, the IRU has reduced risk-weighted assets in the
unit by almost EUR5.7 billion and its lending volume by EUR11 billion.
The Bank recorded a loss before taxes of EUR433 million. This includes
other expenses amounting to EUR81 million and restructuring charges of
EUR282 million.
Operating income fell by EUR256 million or 4.7%, adjusted for the
de-consolidation of Deutsche Hyp and the domestic asset management companies
transferred to Allianz. Operating income after net loan loss provisions
increased 21% year-on-year to EUR4,420 million. Net loan loss provisions
fell significantly by around EUR1 billion to EUR722 million.
As a result of our drive to reduce risk-weighted assets, net interest and
current income before loan loss provisions amounted to EUR1,750 million,
down 17% on the previous year. Adjusted net fee and commission income fell
from EUR2,190 million to EUR1,978 million. At EUR1,414 million, net trading
income after nine months was up significantly by EUR325 million
year-on-year. Administrative expenses decreased by EUR833 million or 16% as
against the adjusted prior-year figures, amounting to EUR4,490 million after
nine months.
Private and Business Clients
The Private and Business Clients division generated an operating result of
EUR182 million for the first nine months of 2003, despite the ongoing
difficult market environment. On the back of a substantial drop in
administrative expenses, net fee and commission income in particular
increased slightly thanks to targeted sales initiatives.
Corporate Banking
The Corporate Banking division generated an operating result of EUR304
million. This was due to a slight increase in margins and a reduction in
loan loss provisions, as well as successful cost-cutting measures.
Dresdner Kleinwort Wasserstein
Dresdner Kleinwort Wasserstein generated an operating result of EUR282
million in the first nine months. This was achieved despite a reduction in
its fixed-income business in the third quarter, and was due to the
successful development of its capital markets business and continued strict
cost control.
Institutional Restructuring Unit
Since the start of the year, the risk-weighted assets bundled in the
Institutional Restructuring Unit (IRU) have declined by just under EUR5.7
billion to the current figure of EUR14.2 billion. The IRU reported an
operating loss of EUR383 million for the first nine months of 2003. This is
mainly due to risk provisions, which at EUR506 million, accounted for more
than two thirds of the Group's total risk provisions.
The regulatory liable capital in accordance with BIS capital adequacy rules
amounted to approximately EUR16.4 billion at the end of the third quarter.
The risk-weighted assets (RWA) in accordance with BIS amounted to
approximately EUR122.2 billion at the same date. Thus, the core capital
ratio at the reporting date amounted to 6.8%, while the total capital ratio
amounted to 13.4%.
Progress thanks to "New Dresdner" program
The Bank is again making progress thanks to the "New Dresdner" program
introduced in August of this year, and is continuing to implement it
systematically and rapidly. The figures for the first nine months show that
the Bank is on the way to achieving sustained profitability again. The
Board of Managing Directors will keep open the option of further
accelerating the reduction in risk-weighted assets in the IRU's
non-strategic portfolio in the fourth quarter. This could mean that the
Bank will not yet meet its interim target of breaking even in terms of its
operating result at the end of 2003.
GAUSS INTERPRISE: Cuts Revenue Forecast by More than 50%
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Gauss Interprise AG, Hamburg (Prime Standard: GSO, ISIN
DE0005532907) announces, that the Management Board of Gauss Interprise AG
under its latest forecasts of revenues for the company is expecting revenues
only to be in the amount of EUR8 million as opposed to EUR19-22 million as
announced earlier. Also losses are expected to be around EUR19.3 million as
opposed to the earlier announcement of EUR4-5 million.
Furthermore Gauss announces that, following a proposal of its 75%
shareholder, 2016090 Ontario Inc., Canada (Ontario), the Management Board
(Vorstand) of Gauss has consented that Gauss shall enter into an agreement
of control with Ontario, whereby Ontario will take control of Gauss within
the meaning of section 291 of the German Corporation Act (AktG).
Ontario and Gauss have duly executed the agreement of control, which is made
under the condition of the approval of the shareholders' meeting of Gauss.
The compensation for outstanding shareholders under § 304 AktG will be EUR0;
Ontario offers to buy all shares of outstanding shareholders pursuant to
section 305 AktG at the price of EUR1,06 per share. The new Supervisory
Board of Gauss, consisting of Mr. Tom Jenkins, Mr. John Shackleton and Mr.
Rudolf Huebner, is expected to favorably recommend the proposal during the
extraordinary shareholders' meeting, which will take place on December 23,
2003.
Also, Gauss announces, that at the request of its 75% shareholder, Ontario,
the Management Board of Gauss has decided to recommend to the shareholders'
meeting of Gauss to authorize the Management Board of Gauss to file a motion
with Frankfurter Wertpapierborse for the withdrawal of the admission of all
shares of Gauss to the regulated market (Geregelter Markt) of Frankfurter
Wertpapierborse (Delisting). As a consequence of this, Ontario offers to
purchase all shares of outstanding shareholders at the price of EUR1.06 per
share. The Supervisory
Board of Gauss is expected to follow this recommendation.
CONTACT: GAUSS INTERPRISE AG
Investor Relations
Kathrin Schuchard
Weidestrabe 120a, 22083 Hamburg
Phone: +49-40-3250-1218
Fax: +49-40-3250-19-1218
E-Mail: investor@gaussvip.com,
Home Page: http://www.gaussvip.com
WCM GROUP: Chairman Underscores Need to Focus on Core Operations
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WCM Beteiligungs- und Grundbesitz-AG, the Frankfurt-based investment group
desperately trying to avert a serious financial crisis, will concentrate on
its core real-estate operations. Intesatrade, citing Focus Magazine, said
WCM Supervisory Board Chairman Dieter Vogel emphasized the plan, saying,
"all (other operations) are being evaluated." This includes WCM's
shareholdings in Commerzbank and Kloeckner-Werke. He also said the company
is not seeking an investor.
WCM's fortunes slumped dramatically last year when it reported a EUR861
million- loss after being forced to write down the value of many of its
shareholdings amidst a slump in stock markets. Mr. Vogel, the former head
of ThyssenKrupp, was brought in recently to head the supervisory board.
Reports say he had been considering options, including a break up and a
EUR400 million fund-raising possibly via a public offer for the group.
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ELAN CORPORATION: Tender Offer for LYONs Due 2018 Ongoing
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Elan Corporation, plc (NYSE:ELN) announced Friday that holders of Liquid
Yield Option(TM) Notes due 2018 (Zero Coupon--Subordinated) (the LYONs)
issued by its wholly owned subsidiary, Elan Finance Corporation Ltd., have
the right to surrender their LYONs(TM) for purchase during the period that b
egins Friday and ends on Monday, December 15, 2003. Pursuant to the
indenture under which the LYONs were issued in December 1998, each holder of
LYONs has the right to require Elan to purchase, until 5:00 p.m., New York
time, on Monday, December 15, 2003, such holder's LYONs at a price equal to
$616.57 per $1,000 principal amount at maturity of the LYONs.
Under the terms of the LYONs, Elan had the option to pay for the LYONs in
cash, in American Depositary Shares, representing Ordinary Shares, of Elan,
or in any combination of cash and ADSs. Elan has elected to pay for the
LYONs in cash. The aggregate principal amount due at maturity for all
outstanding LYONs is approximately $801.2 million. If all outstanding LYONs
were surrendered for purchase, the aggregate cash purchase price would be
approximately $494 million. Elan intends to use a portion of the net
proceeds from its recently completed offerings of Ordinary Shares and 6.5%
Guaranteed Convertible Notes due 2008 to repurchase the LYONs.
In order to surrender LYONs for purchase, holders must deliver a purchase
notice to The Bank of New York, the trustee and paying agent for the LYONs,
on or before 5:00 p.m., New York time, on Monday, December 15, 2003.
Holders may withdraw any LYONs previously surrendered for purchase at any
time prior to 5:00 p.m., New York time, on Monday, December 15, 2003.
Elan filed a Tender Offer Statement on Form TO with the Securities and
Exchange Commission. Elan will make available to LYONs holders, through The
Depository Trust Company, documents specifying the terms, conditions and
procedures for surrendering for purchase and withdrawing LYONs. LYONs
holders are encouraged to read these documents carefully before making any
decision with respect to the surrender of LYONs, because these documents
contain important information regarding the details of Elan's obligation to
purchase LYONs.
The LYONs are exchangeable into 13.75 Elan ADSs per $1,000 principal amount
at maturity of LYONs, subject to certain conditions set forth in the
indenture and in the LYONs, and subject to adjustment under certain
circumstances.
This press release does not constitute an offer to purchase LYONs. The
offer to purchase is made solely by Elan's notice dated November 14, 2003.
About Elan
Elan is focused on the discovery, development, manufacturing, selling and
marketing of novel therapeutic products in neurology, severe pain and
autoimmune diseases. Elan shares trade on the New York, London and Dublin
Stock Exchanges.
CONTACT: ELAN CORPORATION, PLC
Investors:
Emer Reynolds
Phone: 353-1-709-4000
800-252-3526
HIBERGEN: Funding-raising Fails; Board Decides to Close Shop
------------------------------------------------------------
Trinity Biotech plc (NASDAQ: TRIB) announced that the recent fundraising
undertaken by HiberGen has not been successful. As a consequence, the Board
of HiberGen has decided to cease trading with immediate effect.
Trinity invested US$1.37 million in HiberGen in October 2000. Despite the
fact that certain milestones have been achieved by HiberGen, the rate of
progress was such that Trinity decided not to invest further in the Company
and to concentrate all its resources on expanding its core business.
Trinity owns 43% of HiberGen and treated the investment in its financial
statements as an investment in an associated company. Losses consolidated
in the Trinity income statement were US$317,000 in 2002 and US$157,000 in
the first three quarters of 2003. The carrying value in Trinity's balance
sheet at September 30, 2003 was US$968,000 and this amount will be written
off as an exceptional charge in the current quarter.
Trinity Biotech develops, acquires manufactures and markets over 500
diagnostic products for the point-of-care and clinical laboratory segments
of the diagnostic market. The broad line of test kits is used to detect
infectious diseases, sexually transmitted diseases, blood coagulation
disorders, and autoimmune diseases. Trinity Biotech sells worldwide in over
80 countries through its own salesforce and a network of international
distributors and strategic partners. For further information please see the
company's Web site: http://www.trinitybiotech.com
CONTACT: TRINITY BIOTECH
Registered Office
IDA Business Park Southern Cross Road
Bray
Co Wicklow
Ireland
Phone: +353 1 276 9800
Fax: +353 1 276 9888
Home Page: http://www.trinitybiotech.com
Contact:
Rory Nealon
Phone: (353)-1-2769800
E-mail: rory.nealon@trinitybiotech.com
===================
L U X E M B O U R G
===================
MILLICOM INTERNATIONAL: Assigned 'B+' Long-term Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term corporate
credit rating to Luxembourg-headquartered emerging markets mobile
telecommunications operator, Millicom International Cellular S.A. The
outlook is stable. At the same time, Standard & Poor's assigned its 'B-'
long-term senior unsecured debt rating to Millicom's $550 million proposed
notes.
"The proposed notes will make up part of Millicom's debt restructuring and
the proceeds will be used to refinance existing debt, thereby improving the
company's overall maturity profile," said Standard & Poor's credit analyst
Michael O'Brien.
The notes are rated two notches lower than the corporate credit rating on
the company, reflecting structural subordination with regard to priority
obligations at Millicom's operating subsidiaries. At Sept. 30, 2003,
Millicom had total adjusted debt of $845 million.
"Significant exposure to foreign exchange risk is a key ratings risk as
Millicom operates in certain markets that historically have been susceptible
to currency volatility and most of the company's debt is denominated in U.S.
dollars," said Mr. O'Brien. "This can affect cash flow generation and the
ability of the company to upstream cash to the parent level necessary to
service debt."
Cash upstreaming can also potentially be impaired by market-specific
sovereign risk or disagreements with joint-venture partners or regulatory
issues. The renewal in 2005 of a business cooperation agreement with the
Vietnamese government will be key for Millicom, given that the company's
Vietnamese operations currently contribute in excess of 20% of consolidated
EBITDA.
Millicom is also exposed to strong competition in markets in which the
purchasing power of customers is low on a GDP-per-capita basis compared with
more developed markets. In addition, competitive risks might arise in
certain markets in which Millicom's operations are expected to migrate to a
GSM platform, although provision of GSM services should be a positive factor
in the long term.
These risks are, however, mitigated by strong growth prospects in markets in
which Millicom has a presence, due to the current low levels of penetration
and the diversification of risk across 15 emerging market countries in Asia,
Latin America, and Africa.
Millicom is expected to successfully manage technology transition in Latin
America and Pakistan, renew its business cooperation agreement in Vietnam,
and continue to grow free operating cash flow, while mitigating regulatory
risk and controlling costs across its operations. Standard & Poor's also
expects the company to exercise caution with regard to acquisitions and
entrance to potential new markets.
=====================
N E T H E R L A N D S
=====================
BUHRMANN N.V.: Obtains New EUR880 Million Credit Facility
---------------------------------------------------------
Buhrmann N.V. has strengthened its financing structure by adjusting the
interest and maturity profile of its debt. This was achieved by obtaining a
fully underwritten 7-year senior secured credit facility of EUR880 million.
This new credit facility will be used to replace the existing facility. In
addition, Buhrmann will issue convertible subordinated bonds of
approximately EUR110 million, which will reduce the amount of the new credit
facility. This new overall financing package provides the flexibility to
potentially refinance the outstanding US$350 million 12.25% Senior
Subordinated Notes due 2009, which are redeemable as from November 1, 2004.
Buhrmann's positive available cash flow and the proceeds from the sale of
the Paper Merchanting Division have been used to reduce the Group's debt
significantly. Through this new refinancing initiative, Buhrmann aims to
achieve a better-balanced capital structure. The current refinancing
initiative strengthens the base from which the Group can capitalize on its
position as a focused, leading business-to-business distributor of office
products and graphic systems.
Details of new credit facility
The new senior credit facility consists of: a revolving credit facility of
approximately EUR320 million, maturing December 2008; an amortizing term
loan A of approximately EUR200 million, maturing December 2010; and a term
loan B of approximately EUR360 million, maturing December 2010.
Deutsche Bank and ABN Amro have underwritten the new credit facility subject
to the usual conditions and are acting as Joint Bookrunners.
Details of Convertible Bonds
The Convertible Bonds will be issued by Buhrmann N.V. and will be guaranteed
by certain subsidiaries of the Group, in each case on a unsecured
subordinated basis. The coupon is expected to be within the 2.00% to 2.50%
range and a conversion price range of EUR8.0 to EUR8.40. The issue and
redemption prices are set at 100%. The Convertible Bonds are to mature in 7
years, with Buhrmann having the right to call the Convertible Bonds at par
from July 2008, subject to a 150% trigger. The shares underlying the issue
and the "greenshoe" will represent, in aggregate, up to approximately 13.6
million shares of Buhrmann or up to 10% of the outstanding share capital.
Deutsche Bank is acting as Sole Bookrunner for the offering.
Application will be made to list the Convertible Bonds on Euronext Amsterdam
N.V. in December 2003. Prior to such listing, Buhrmann will publish an
offering circular in order to meet the listing requirements. The
Convertible Bonds will be placed solely with institutional investors outside
the U.S., Canada and Japan in reliance on Regulation S.
Charges in fourth quarter P&L related to this refinancing
Capitalized financing fees related to the existing facility are to be
written off, which will lead to an exceptional (non-cash) interest charge of
EUR26 million. In addition, project expenses of about EUR5 million are
incurred.
BUHRMANN N.V.: Seals Bond Offering to Institutional Investors
-------------------------------------------------------------
Buhrmann N.V. has successfully completed the placement of guaranteed
subordinated convertible bonds of approximately EUR114 million, which
includes the fully exercised greenshoe of EUR11 million. The placement is a
part of the refinancing initiative announced earlier.
The coupon has been set at 2.00%, payable annually, which is at the low end
of the estimated range. The set conversion price of EUR8.40 is at the top
end of the estimated range, with a 27.3% conversion premium to the closing
price of the Buhrmann shares traded on Euronext Amsterdam on Thursday
November 13, 2003.
Floris Waller, Chief Financial Officer of Buhrmann, said: "We are delighted
to have successfully placed this offering, which will be instrumental in
optimizing Buhrmann's debt portfolio. We are happy that the many strengths
of the Buhrmann Group have been recognized by institutional investors."
The Convertible Bonds are being issued by Buhrmann N.V. and will be
guaranteed by certain subsidiaries of the Group, in each case on a unsecured
subordinated basis. The issue and redemption prices are set at 100 percent.
The Convertible Bonds are to mature in 7 years, with Buhrmann having the
right to call the Convertible Bonds at par from July 2008, subject to a 150%
trigger. Deutsche Bank is the Sole Bookrunner for the placement.
Application will be made to list the Convertible Bonds on Euronext Amsterdam
N.V. in December 2003. Prior to such listing, Buhrmann will publish an
offering circular in order to meet the listing requirements. The
Convertible Bonds will be placed solely with institutional investors outside
the U.S., Canada and Japan in reliance on Regulation S.
KAPPA BEHEER: Fitch Assigns 'B' Rating to Senior Notes
------------------------------------------------------
Fitch Ratings assigned a 'B' rating to the Senior Notes of Kappa Beheer B.V.
(Kappa). The agency also assigned Kappa Packaging B.V., a subsidiary of
Kappa, a Senior Unsecured rating of 'B+' and a Senior Secured rating of
'BB'. The Short-term rating is 'B' and the rating outlook is stable.
Kappa's Senior Notes comprise EUR370 million 10.625% Senior Subordinated
Notes due 2009, USD100 million 10.625% Senior Subordinated Notes due 2009,
EUR145 million 12.5% Senior Subordinated Discount Notes due 2009 and EUR95
million 10.625% Senior Notes due 2009.
The Senior Unsecured 'B+' rating reflects Kappa's leading market position in
the European paper and packaging sector, the large scale and integrated
nature of its operations, and a management team with experience of operating
with financial leverage in a mature and cyclical industry. The ratings also
take into account the current high leverage and the need to improve cash
flow generation in order to meet the increasingly onerous debt amortization
schedule. The three-notch differential between the 'B' rating assigned to
the Notes and the 'BB' rating assigned to the Senior Secured facilities
reflects the agency's view of the significant difference in the potential
recovery prospects between the two classes of debt in the event of any
future forced restructuring or distressed sale scenario. The differential
reflects the subordination of the Notes, as well as the relative sizes of
the two classes of debt.
The majority of the Notes were issued in May 2001 in connection with the
acquisition of the packaging business of Assi-Doman in 2001. The EUR95
million 10.625% Notes were issued in May 2003 to redeem the EUR100 million
Mezzanine Notes. The EUR1,755 million Senior Secured credit facilities were
also used to finance the acquisition and refinance the debt issued in the
1998 leveraged buyout of Kappa.
Kappa, the issuer of the Notes, is a holding company and has no material
assets other than the shares of Kappa Packaging BV and the subordinated
inter-company funding loan. It is entirely reliant on upstream payments
from its subsidiaries in the form of dividends to make coupon payments on
the Notes. The proceeds were down-streamed to Kappa Packaging B.V. through
a subordinated inter-company funding loan. The Notes have been rated one
notch below the Senior Unsecured rating to reflect their subordination in
right of payment to the Senior Secured credit facilities issued at the Kappa
Packaging level as well as the trade creditors at the operating subsidiary
level.
The Notes benefit from second ranking upstream guarantees from Kappa
Packaging and downstream guarantees from Kappa Holding B.V., both of which
are holding companies. Fitch believes that the guarantees are of limited
benefit since the lenders of the Senior Secured facilities can insist on
their release and complete a sale of the business during the 120 days
standstill period. Furthermore, the lenders of the Senior Secured
facilities are under no obligation to provide the holders of the Notes with
a fair value opinion in relation to the sale price achieved.
For the six months period ended June 30, 2003, Kappa Packaging achieved
sales and EBITDA (before exceptional items) of EUR1,453 million and EUR229
million respectively, compared to sales and EBITDA of EUR1,465 million and
EUR239 million in the first half of 2002. For the full year the company
expects operating results broadly in line with those achieved in 2002.
KONINKLIJKE AHOLD: Carrefour Takes over Two Polish Hypermarkets
---------------------------------------------------------------
Ahold has reached agreement to sell two Hypernova hypermarkets in Poland to
Carrefour Poland for an undisclosed sum. The agreement will take effect on
November 18, 2003.
The transfer of ownership of the hypermarkets is subject to a number of
conditions, including anti-trust and other approvals.
The hypermarkets are located in the towns of Sosnowiec and Bydgoszcz (at
Fordonska Street). All associates employed in the two hypermarkets will
have their employment transferred to Carrefour Poland. The divestment of
the stores is part of Ahold's overall strategic plan to restructure its
portfolio of assets and dispose of underperforming assets and operations.
===========
N O R W A Y
===========
PETROLEUM GEO-SERVICES: Ratings Withdrawn after Chapter 11 Exit
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'D' ratings on
Petroleum Geo-Services ASA. At the same time, Standard & Poor's
revised its CreditWatch listing on subsidiary Oslo Seismic
Services Inc. to positive from developing.
"Last week, Petroleum Geo-Services emerged from Chapter 11 bankruptcy
protection," noted Standard & Poor's credit analyst Bruce Schwartz.
"Standard & Poor's intends to assign new ratings to Petroleum Geo-Services
and its financings in the next 45 days."
At the time of the Petroleum Geo-Services bankruptcy filing in July 2003,
the ratings on Oslo Seismic were placed on CreditWatch with developing
implications, reflecting the possibility that Oslo Seismic could be
entangled in Petroleum Geo-Services' restructuring process. As Petroleum
Geo-Services has emerged from bankruptcy protection, such an event is no
longer a concern.
The ratings on Oslo Seismic likely will be upgraded along with the
assignment of new ratings on Petroleum Geo-Services.
=====================
S W I T Z E R L A N D
=====================
4M TECHNOLOGIES: Third Quarter Operations Break Even
----------------------------------------------------
During Q3/2003 the Group made net sales of CHF15.472 million, whilst
generating a gross margin of CHF3.398 million.
Deduction of operating expenses produced a break-even operating result for
the quarter, leaving the net loss after financial costs at CHF0.217 million.
Financial costs mainly consist of interest incurred on the convertible loan
balances actually drawn but are in fact most likely to be converted into
equity at maturity of the convertible loan in 2005.
Certain sales due to be made in Q3 have been postponed due to delayed
shipment of molding machines contracted independently by Asian clients for
installation with 4M machines. The delayed 4M machines are included in
"inventories," which have increased to CHF16.576 million. The Group has
been cash positive during Q3 and at profit and loss break-even levels during
the last two quarters.
Thanks to those results and to the convertible loan, the Group also has
adequate funding for the future. The challenge is on further to increase
billings and gross margins, whilst continuing controlled reduction of costs
and overheads.
The opening loss in Q1 has been reduced at operating level to CHF2.784
million for the 9 months to 3rd quarter. Continued reduction of the
accumulated losses and sustained future profit remain the feasible medium
term objectives. New 4M production in DVD-R and CD-R formats machines
introduced this year has achieved an increasing audience of clients. The
Group continues its substantial commitment to R&D.
CONTACT: 4M TECHNOLOGIES
Avenue des Sports 42
CH-1400 Yverdon-les-Bains
Phone: ++41 (0) 24 4237 111
Fax: ++41 (0) 24 4237 181
E-mail: jclaude.roch@4m-inc.ch
Investor Relations
Jean-Claude Roch
===========================
U N I T E D K I N G D O M
===========================
BRITAX GROUP: On CreditWatch Due to Uncertain Trading Prospects
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term corporate
credit and 'B-' subordinated debt ratings on U.K.-based engineering group
Britax Group PLC on CreditWatch with negative implications, following the
group's announcement that operational and trading issues are likely to weigh
on its performance for the fourth quarter of 2003.
The placement is also in line with Standard & Poor's previous indication
that the ratings could be lowered if financial metrics deteriorated from the
levels reached at June 30, 2003, and that such ratings assumed an
improvement of financial measures in 2004. At Sept. 30, 2003, the group
reported total debt of GBP221.2 million ($373.3 million).
"The financial performance of Britax's aircraft interior systems division in
the final quarter of 2003 is affected by several adverse factors," said
Standard & Poor's credit analyst Virginie Casin. "In particular, the
initial stages of three "blue sky" contracts (that is, new product programs)
are currently overlapping. Usually, management tries to stagger them, but
this has not been possible this year. Under such contracts,
heavy costs relating to the product development and industrial ramp-up
stages initially burden profitability and are subsequently paid back over
the life of the contracts. The overlap of new contracts in 2003 has,
however, resulted in excessive onetime costs, some of which may not be fully
recoverable."
In Britax's other divisions, which offer public safety and child-care
products, weak market demand in certain segments is partly offset by the
group's efforts to reduce operating costs.
Review of the CreditWatch status will focus on the expected extent of the
deterioration in the quarter ended Dec. 31, 2003, and the likelihood and
timing of recovery in subsequent quarters. A potential downgrade is
expected to be limited to one notch. Standard & Poor's expects to complete
the review within the next three months.
BRITISH ENERGY: Clarifies Recent Statement on Power Reserves
------------------------------------------------------------
Further to the October output statement released Thursday, British Energy
wishes to clarify the statement on 2003/4 nuclear output which should read:
2003/04 U.K. Nuclear Output
At the outset of the year, the Company's forecast for total U.K. nuclear
output for the current financial year was approximately 67 TWh after
establishing a reserve for unplanned outages in excess of 8 TWh. The figure
of approximately 5 TWh, previously stated, excluded a provision for minor
station losses. Based on outages to date and the Company's current
expectations as to the return to service of Sizewell B and Heysham 1, the
remaining reserve for unplanned outages is in excess of 2 TWh.
Furthermore, having now substantially completed the outage program for the
current financial year, the overall operational risk is expected to be
lower.
*****
British Energy announced losses of GBP4.3 billion in June after slashing the
value of its power plants. It is blaming the high fixed costs of nuclear
generation and a steep decline in wholesale electricity prices for its woes.
CONTACT: BRITISH ENERGY
Investor Relations
Paul Heward
Phone: 01355 262 201
EURODIS ELECTRON: Rogers Appointed Non-executive Chairman
---------------------------------------------------------
The Company announces that Robert Leigh stepped down as company Chairman on
Friday. In relation to Mr. Leigh's resignation, the company is pleased to
announce the appointment of Douglas Rogers as non-executive Chairman.
Mr. Rogers has spent his career in a variety of well-known industrial
businesses, including twelve years with Newman Tonks PLC as Group Chief
Executive and then as Chairman. More recently, he has been Chairman of The
Oliver Group PLC, Crabtree Group PLC, United Carriers PLC, Barcom PLC, GBE
International PLC, James Wilkes PLC and Savage PLC and a non-executive
director of Epwin PLC.
Mr. Rogers is currently a non-executive director of Dowding and Mills PLC,
Hydrex Group Limited, Carpet Express Limited and Partnering Coatings
Limited.
Steve Swayne, Chief Executive of Eurodis Electron PLC said:
"I am looking forward to working with a man of such high caliber. He brings
a wealth of experience to the Board and has the right credentials to guide
Eurodis through its turnaround and back to profitability. I would like to
thank Robert for all he has achieved at Eurodis."
*****
The board of Eurodis Electron previously announced proposals to raise
approximately GBP17.8 million (EUR25.2 million), before expenses, by means
of an issue of New Ordinary Shares. The net proceeds will be used, inter
alia, to strengthen the Group's balance sheet and finance the Group's
working capital requirements. The company said, "trading conditions have
remained very difficult, and despite the measures taken by the Board, the
Group faces a requirement for additional working capital funding."
CONTACT: EURODIS ELECTRON PLC
Steve Swayne, Chief Executive Officer
Phone: 01737 242 464
BELL POTTINGER FINANCIAL
John Coles/Billy Clegg
Phone: 0207 861 3232
HIBERNIA FOODS: Sale Could Come Before Christmas, Says Receiver
---------------------------------------------------------------
KPMG, the receiver of Hibernia Foods, is confident of finding a buyer for
the manufacturer of Sara Lee cakes and Mr. Brains faggots before Christmas,
according to Ananova.
More than 50 companies are interested in acquiring the whole or part of
troubled Hibernia Foods, according to Evening Gazette last week. A
spokesman for administrators KPMG then 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."
Receiver Myles Halley said a sale of the magnitude of Hibernia was very
complex and it would be "some time" before KPMG could complete a deal and
make a formal announcement, Ananova said.
KPMG manages Hibernia Foods Holdings, as well as six of its subsidiaries,
which employ about 2,000 staff at six sites in the U.K. It has decided to
keep all the staff while they seek for a buyer for the company.
The six subsidiaries of Hibernia Foods Holdings (U.K.) Limited include
Hibernia Brands Limited, Majestic Food Group Limited, Hibernia Holdings
Limited, Hibernia Chilled Foods Limited, Hibernia Foods Limited and Hibernia
Foods Bakeries Limited.
IMPERIAL CHEMICAL: S&P Keeps Debt Ratings Unchanged
---------------------------------------------------
Standard & Poor's Ratings Services said that its unsecured bond ratings on
U.K.-based specialty chemicals and paints manufacturer Imperial Chemical
Industries PLC (ICI; BBB/Stable/A-2) will remain unaffected by ICI's
recently agreed settlement with its U.K. pension fund.
In a statement published on October 16, 2003, Standard & Poor's raised
concerns about the level of structural subordination within ICI group,
partly because of an asset-backed guarantee issued to the pension fund in
connection with that settlement.
Following a further review, and work undertaken by management, Standard &
Poor's now considers that these concerns have been reduced. Consequently,
bonds issued by ICI PLC, ICI Wilmington Inc., or any other of the group's
finance entities are expected to continue to be rated at the level of the
'BBB' corporate credit rating on ICI.
NTL INC.: Third-quarter Net Loss Slips 68.2% to GBP117.3 Million
----------------------------------------------------------------
NTL Incorporated (NASDAQ: NTLI) announced its third quarter 2003 results.
Commenting on the results, Simon Duffy, Chief Executive Officer of NTL,
said: "I am very pleased to announce NTL's third quarter results, which
reflect the continued improvement in the operating performance of the
Company.
"NTL Home continues to accelerate customer growth, adding 56,200 net
customers and 123,400 Revenue Generating Units (RGUs) in the third quarter.
Broadband growth is maintaining momentum as we continue to increase our
market share in our franchise areas. The introduction of compelling,
bundled offers has enabled us to attract more telephony and digital
television customers during a period of increased market activity in both
sectors.
"NTL Business achieved a segment profit margin of approximately 39% as a
consequence of restructuring the division, cutting costs and terminating
unprofitable business.
"Both the Broadcast and Carrier divisions grew revenues and segment profit
from the second to the third quarter 2003, and NTL Ireland continues to
increase segment profit through the reduction of bad debt.
"Shared Services benefited from the re-negotiation of the IBM contract for
outsourced IT services, as well as other cost efficiencies in the third
quarter.
"We expect to complete the current rights offering on November 17, raising
net proceeds of GBP824.3 million ($1,370.0 million) which will be used, with
cash on hand, to reduce high cost debt, generating annual cash interest
savings of approximately GBP124.0 million ($206.1 million)."
Highlights of Results for Three and Nine Months Ended September 30, 2003
Financial Highlights Quarterly Results (unaudited)
(GBP) ($)
(In millions) Q3-2003 Q3-2002 Q3-2003 Q3-2002
Revenues Home GBP371.8 GBP350.4 $598.7 $543.9
Business 69.4 76.7 111.8 119.2
Broadcast 67.6 63.4 108.8 98.5
Carriers 28.5 28.5 45.9 44.5
Ireland 17.9 15.7 28.9 24.2
------------- ----------- -------- ---------
Total revenues GBP555.2 GBP534.7 $894.1 $830.3
============= =========== ======== =========
Segment profit (loss)
Home GBP176.5 GBP151.5 $284.1 $234.5
Business 26.9 18.0 43.3 28.1
Broadcast 28.2 28.1 45.4 43.7
Carriers 23.9 24.5 38.5 38.1
Ireland 7.5 4.5 12.2 6.9
Shared services (61.6) (62.9) (99.2) (97.7)
------------- ----------- -------- ---------
Combined segment profit GBP201.4 GBP163.7(1) $324.3 $253.6(1)
============= =========== ======== =========
Combined segment profit margin %
36.3% 30.6% 36.3% 30.6%
Net (loss) GBP(117.3) GBP(369.1) $(188.9) $(567.6)
(1) Q3 2002 combined segment profit is presented prior to the effect of
changes in certain assumptions relating to allocation of costs between
capital and operating expense that were made in Q4 2002. Had they been
applied in Q3 2002, these changes would have reduced Q3 2002 combined
segment profit by approximately GBP10.2 million ($15.8 million) to GBP153.5
million ($237.8 million) and reduced combined segment profit margin from
30.6% to 28.7%. The divisional reductions are approximately: NTL Home
GBP2.8 million ($4.3 million); NTL Business GBP2.0 million ($3.1 million);
NTL Broadcast GBP0.3 million ($0.5 million) and shared services GBP5.1
million ($7.9 million).
Group Highlights
Unless otherwise disclosed all amounts as of September 30, 2003 are based on
an exchange rate of $1.66 to GBP1 and all amounts disclosed for the period
ended September 30, 2003 are based on an exchange rate of $1.61 to GBP1.
Revenue
For the three months ended September 30, 2003, consolidated revenues
increased by 3.8% in U.K. pounds to GBP555.2 million ($894.1 million) from
GBP534.7 million ($830.3 million) for the same period of 2002.
Group revenue growth was mainly due to customer and RGU growth within NTL
Home where revenues increased by GBP21.4 million over Q3 2002. In addition,
revenues in our NTL Broadcast division increased by GBP4.2 million and
revenues in NTL Ireland increased by GBP2.2 million over Q3 2002. This was
partially offset by a fall in revenues in NTL Business, as the division
continues to be repositioned for profitable growth in 2004.
The growth in NTL Home revenues for Q3 2003 was impacted by a one-time
reduction of GBP5.6 million ($9.0 million). This reduction in revenue was
the result of passing on to our wholesale customers a refund in port
charges, billed to us by BT, for the period August 2001 to July 2003.
Combined segment profit
For the three months ended September 30, 2003 combined segment profit
increased by 23.0% in U.K. pounds to GBP201.4 million ($324.3 million) from
GBP163.7 million ($253.6 million) for the same period of 2002.
Contributing to the improvement in combined segment profit was the increased
number of high-margin broadband customers in NTL Home, a focus on increased
profitability in NTL Business, and further operational efficiencies
throughout the Company.
Combined segment profit also benefited from the completion of several
initiatives, the benefits of which were primarily realized in the third
quarter. These included a GBP7.5 million ($12.1 million) reduction in IBM
IT rates to both shared services and Ireland, of which GBP4.6 million ($7.4
million) will recur quarterly; as well as GBP5.4 million ($8.7 million) and
GBP1.8 million ($2.9 million) in NTL Home and NTL Business respectively,
related to a reduction in local government charges associated with the local
loop component of the NTL network.
Net loss
For the three months ended September 30, 2003, net loss decreased by 68.2%
in U.K. pounds to GBP117.3 million ($188.9 million) from GBP369.1 million
($567.6 million) for the same period of 2002. This change was primarily the
result of a decrease in other charges of GBP211.1 million ($312.0 million)
to GBP2.6 million ($4.2 million). Other charges of GBP213.7 million ($316.2
million) for Q3 2002, include provisions of GBP194.5 million ($287.7
million) for un-collectable amounts due from NTL Europe Inc. and certain of
its subsidiaries, asset impairment charges of GBP18.0 million ($26.6
million) and restructuring charges of GBP1.3 million ($1.9 million). In
addition, there was a reduction in depreciation expense of GBP65.5 million
($89.1 million) from Q3 2002 due to a decrease in the carrying value of
fixed assets as a result of the adoption of fresh-start reporting.
These reductions were partially offset by an increase in interest expense of
GBP58.3 million ($88.0 million) which was a result of additional borrowings
under the 19% Notes in January 2003. In addition, the amendment and
restatement of our Senior and Working Capital Credit Facilities in January
2003 increased the rate of interest payable and caused us to amortize
certain costs.
Fixed asset additions (accrual basis)
Third quarter fixed asset additions (accrual basis) were GBP58.9 million
($95.0 million). Approximately 50% of the quarter's fixed assets additions
(accrual basis) were for CPE, in support of NTL Home's customer growth.
Total fixed asset additions (accrual basis) continue below the January 10,
2003 8-K projections due to capital efficiencies and the timing of projects
within NTL Business and NTL Broadcast.
Cash and cash equivalents
At September 30, 2003, NTL had cash and cash equivalents of GBP282.4 million
($469.4 million). NTL's liquidity will be further enhanced by the annual
cash interest savings of approximately GBP124.0 million ($206.1 million)
gained after repaying the 19% Notes and the working capital facility from
the proceeds of the current rights offering and cash on hand. As a result
of these cash interest savings, NTL expects to become free cash flow
positive on an annual basis.
Segment Review
NTL Home
In the third quarter, NTL Home continued to accelerate the growth in net
customer additions by adding approximately 56,200 net customers, and ending
the quarter with 2,809,500 customers. In addition, NTL Home added
approximately 123,400 RGUs in the third quarter, ending with 5,364,100 RGUs
subscribing to a total of 5,785,600 services.
For the three months ended September 30, 2003, NTL Home revenues increased
by 6.1% in U.K. pounds to GBP371.8 million ($598.7 million) from GBP350.4
million ($543.9 million) for the same period of 2002. The increase in
revenue was primarily the result of an increase in the number of customers
subscribing to our broadband Internet services.
For the three months ended September 30, 2003, NTL Home segment profit
increased by 16.5% in U.K. pounds to GBP176.5 million ($284.1 million) from
GBP151.5 million ($234.5 million) for the same period of 2002. The increase
in segment profit was the result of higher revenues, lower CATV programming
costs and a reduction in telephone interconnection costs.
NTL Home has increased the number of its triple play customers (taking
telephone, TV and broadband internet services) by 85.6% year over year to a
total of 551,100 from 297,000 in Q3 2002, with 19.6% of customers now
subscribing to all three services compared to 11.1% in Q3 2002.
Average Revenue per User (ARPU) increased to GBP41.43 in the third quarter,
an increase of 6.5% over Q3 2002. Increased ARPU is due to high broadband
take up, an increased number of triple RGUs and the continued migration of
telephony customers to 'Talk Plan' packages.
Annualized churn declined from 16.4% in Q3 2002 to 14.4% in Q3 2003,
reflecting continuing improvements in the overall customer experience. As
anticipated, churn increased during the third quarter versus the prior
quarter, as there is a seasonally high incidence of house movers during the
summer months requiring disconnects.
The number of broadband customers increased by approximately 100,400 to
864,600 in the third quarter and stands at over 911,000 today. Over 30% of
customers now subscribe to broadband services reflecting NTL Home's strategy
of initially upselling broadband services to its existing customer base.
NTL Home increased the number of on-net telephony customers by 36,100 to
2,489,800 in the quarter, compared to a loss of 27,900 telephone customers
in Q3 2002. NTL Home continues to grow its telephony market share and has
increased its customer base to over 2,500,000 on-net subscribers today.
After the removal of 15,000 'zero pay' analog customers that were identified
as part of our billing systems migration, the television customer base
declined by 13,100. However, the number of digital television customers
increased for the sixth consecutive quarter to 1,294,800 in Q3 2003, an
increase of approximately 87,000 over Q3 2002, and now represents 64% of NTL
Home's total cable television subscribers.
NTL Home - Summary Customer Statistics:
Q3-2003 Q2-2003 Q1-2003
Total Customers (1) 2,809,500 2,753,300 2,713,500
Customer additions 158,500 129,300 116,100
Customer disconnects 102,300 89,500 89,000
Net customer movement 56,200 39,800 27,100
Churn (annualized) (2) 14.4% 12.9% 13.0%
Revenue Generating Units (3) 5,364,100 5,240,700 5,125,300
Television(4) 2,009,700 2,022,800 2,037,700
DTV 1,294,800 1,269,700 1,255,200
Telephone 2,489,800 2,453,700 2,426,700
Broadband 864,600 764,200 660,900
Service Units 5,785,600 5,666,500 5,561,600
Internet dial-up and DTV access
421,500 425,800 436,300
Internet dial-up free use (5)
0 0 0
Average Revenue Per User (6) GBP41.43 GBP41.04 GBP40.65
Q4-2002 Q3-2002
Total Customers (1) 2,686,400 2,667,000
Customer additions 105,800 84,000
Customer disconnects 108,100 113,000
Net customer movement (2,300) (29,000)
Churn (annualized) (2) 15.9% 16.4%
Revenue Generating Units (3) 4,983,900 4,870,900
Television(4) 2,055,300 2,065,300
DTV 1,229,000 1,207,800
Telephone 2,411,500 2,425,000
Broadband 517,100 380,600
Service Units 5,454,100 5,528,500
Internet dial-up and DTV access
470,200 486,600
Internet dial-up free use (5)
0 171,000
Average Revenue Per User (6) GBP40.03 GBP38.89
(1) Starting in the 3 months ended December 31, 2002, total customers
include master antenna television, or MATV customers
(2) Our customer churn rate is calculated by dividing the number of
customers lost in the most recent quarter, multiplied by four, by the
average total number of customers we serviced during that quarter.
(3) Each telephone, television and broadband Internet subscriber directly
connected to our network counts as one RGU. Accordingly, a subscriber who
receives both telephone and television service counts as two RGUs. RGUs may
include subscribers receiving some services for free or at a reduced rate in
connection with incentive offers. The National Cable & Telecommunications
Association (NCTA) reporting guidelines for the U.S. Cable industry do not
recognize dial-up Internet customers as RGUs, although they are revenue
generating for NTL.
(4) During Q3 2003 in connection with the migration of several billing
systems under our billing system integration program, we identified
approximately 15,000 'zero-pay' analog TV RGUs that have since been removed
from our subscriber reporting tables.
(5) Service to these free use customers was discontinued in October 2002.
(6) Average Revenue Per User is calculated on a monthly basis by dividing
total revenues generated from the provision of telephone, cable television
and Internet services to customers who are directly connected to our network
in that month, exclusive of VAT, by the average number of customers in that
month. ARPU includes the former customers of BT Cable and MATV subscribers.
To view full report and financials:
http://bankrupt.com/misc/NTL_Incorporated.htm
PACE MICRO: Appoints David Brocksom Finance Director
----------------------------------------------------
The Board of Pace Micro Technology plc, a leader in digital television
technology, has announced a new member of the Board with the appointment of
David Brocksom as Finance Director. Mr. Brocksom, currently Group Finance
Director at Avesco plc, is expected to take up his position at Pace during
the early part of 2004.
Mr. Brocksom has extensive experience in the financial management of listed
companies, most recently at Avesco where his responsibilities include all
aspects of the Group's financial affairs, including tax, treasury and
banking.
Prior to joining Avesco Mr. Brocksom held a series of senior roles including
Group Finance Director at Tele-Cine Cell Group plc and Group Finance
Director at Westport Group plc. Mr. Brocksom qualified as a Chartered
Accountant with PricewaterhouseCoopers.
Sir Michael Bett, Chairman of Pace Micro Technology, commented: "I am
delighted that David Brocksom is able to join Pace. The combination of
David's professional ability, track record and enthusiasm for the task in
hand will be of immense value to Pace."
*****
Pace Micro recently said that despite its steady progress in the U.S., the
world's largest digital television market, its operations in the region will
continue to lose money for the next six months.
CONTACT: PACE MICRO TECHNOLOGY PLC
Helen Kettleborough
Phone: 01274 538005/07887 634083
CITIGATE DEWE ROGERSON
Ginny Pulbrook
Phone: 020 7282 2945
QUEENS MOAT: Sells Liverpool Moat House for GBP20 Million
---------------------------------------------------------
The Board of Queens Moat Houses plc announces that terms have been agreed
for the sale of the Liverpool Moat House to a subsidiary of Grosvenor
Limited for a total consideration of GBP20 million in cash.
The Hotel is under a compulsory purchase order from Liverpool City Council
on behalf of Grosvenor Limited as part of the comprehensive redevelopment of
the Paradise Street Development Area. The disposal is therefore conditional
upon the Secretary of State approving the compulsory purchase order and
steps being taken by the subsidiary of Grosvenor Limited to initiate the
redevelopment. Completion would take place between July 2004 and January
2005.
The Hotel, which has 263 rooms, generated trading profits of GBP2.5 million
on turnover of GBP6.5 million during the year ended December 29, 2002. As
at December 29, 2002, the Hotel had a book value of GBP18 million and the
Board believes that the disposal consideration would be greater than any
potential valuation determined by a Land Tribunal.
CONTACT: QUEENS MOAT HOUSES
Phone: 01708 730522
Stuart Metcalfe, Group Chief Executive
Ashley Krais, Group Finance Director
COLLEGE HILL
Phone: 020 7457 2020
Mark Garraway
Crawford Burden
SP HOLDINGS: New Strategy to Bear First-half Profit Next Year
-------------------------------------------------------------
SP Holdings PLC, the marketing and financial services company, expects to
announce its results for the year ending October 31, 2003 in January 2004.
The Company makes these comments regarding its performance during the second
half for the period from May 2003 to October 2003:
Renaming
The Company secured shareholder approval to change its name from 'World
Sports Solutions plc' to 'SP Holdings PLC' on August 1, 2003. The change in
name reflected the Company's strategy to broaden its activities beyond
sports to include the entertainment and leisure sectors, as well as
financial services.
Financial Performance
The business strategy introduced by the new management team in April 2003
has led to a substantial improvement in the Company's performance in the
second half of the year. Its operating businesses are all trading in line
with the Board's expectations. The Company anticipates that it will move
into profit during the first half of the year ended October 31, 2004, a
significant turn-around from the reported loss before tax of GBP9.763
million for the year ending October 31, 2002.
Business Development - Marketing Services
The Company's marketing businesses provide specialist marketing services to
the sports, entertainment and leisure sectors.
The Company's subsidiary, SP Active Ltd., has grown its marketing services
operation through the acquisition of Chris Reed Marketing, a specialist
media and brand barter organization; and Retail Source, a retail brand
consultancy.
Additionally, it has announced a new broadcast joint venture with Diverse, a
leading independent television company, to develop broadcast content and
intellectual properties. These acquisitions have brought senior marketing
talents and new revenue streams into the business, have been successfully
integrated into the business, and are trading satisfactorily to the
expectations of the Board of the Company.
The Company has also acquired Observebrands -- a retail fashion specialist.
This business has been incorporated into a new subsidiary, SP Brands. It
will further develop the Company's growing retail consultancy business and
is also trading to the Board's expectations.
The marketing services division has enjoyed a strong business performance
during the second half, attracting clients that include JVC, Thomson TUI,
Channel 4, Heinz, Procter & Gamble, Associated Press, BBC, BSkyB, Sopexa,
and News International.
Business Development - Financial Services
The Company's financial services business provides a range of financial
services to private individuals and organizations. The Company's private
client business has been strengthened through the acquisition of SP
Financial Services and Robert Ward & Associates. The financial services
division is trading to the expectations of the Board.
Mottram Partners, the Company's legal, accounting and compliance business
has completed the acquisition of the goodwill and assets of OAS (U.K.) and
is trading satisfactorily.
The Company has also acquired Provisor Global Search Ltd., a specialist
recruitment consultancy.
Directors
The Company has strengthened the Board though the appointment of Steve
Hayward as Chief Operating Officer. He was formerly Director of Trade
Marketing for Coca-Cola International, and Senior Vice President
International Marketing at CIC.
The Company also has announced the appointment of Sally Hart as
Non-Executive Director. She brings excellent experience of working in
professional sports, particularly Formula 1.
Outlook
The business strategy introduced in April 2003 has enabled the Company to
trade satisfactorily despite the well-publicized trading conditions that
have adversely affected so many organizations in the marketing and financial
services
sectors. The Company believes it is well placed to take advantage of any
economic upturn. In the meantime, the Company believes that there are still
many high quality acquisition opportunities, through which it can continue
to strengthen its competitive advantage and increase earnings.
*****
SP HOLDINGS PLC operates two divisions: SP Active Limited, its marketing
subsidiary, and SP Financial Services and Mottram Partners, its subsidiaries
in the area of financial services.
SP Active Limited announced the acquisition of Chris Reed Marketing Ltd, the
brand/media barter specialist, on August 1, 2003.
On September 29, 2003 SP Holdings announced the acquisition of the goodwill
and tangible assets of the independent financial advisor Robert Ward.
SP Holdings announced the acquisition of 'Observebrands', a specialist
retail and fashion brand consultancy, via its new subsidiary, SP Brands
Limited, on October 20, 2003.
SP Holdings announced the acquisition of the entire issued capital of
Provisor Global Search Limited, a specialist human resources consultancy, on
October 27, 2003.
SP Holdings announced the acquisition of the entire issued capital of Retail
Source Limited, a specialist retail marketing consultancy, on November 3,
2003.
SP Holdings announced the appointment of Steve Hayward as Chief Operating
Officer on November 3, 2003.
SP Holdings announced the establishment of a joint venture between its
subsidiary, SP Active Ltd and Diverse Production, a leading independent
television company, to own and develop new broadcast intellectual properties
on November 14, 2003.
CONTACT: SP HOLDINGS PLC
Phone: 020 7292 8950
Simon Eagle, Chief Executive
HUDSON SANDLER
Phone: 020 7796 4133
Nick Lyon/Wendy Baker
THOMAS COOK: German Owner Assures Full Backing Despite Losses
-------------------------------------------------------------
Lufthansa has no plans of selling tourism unit, Thomas Cook, Chief Executive
Wolfgang Mayrhuber told Die Welt, according to Dow Jones. The report came
after KarstadtQuelle AG, joint operator of Thomas Cook, scrapped its
full-year earnings target partly because of weak business at the travel
venture.
Thomas Cook is pursuing a program aimed at saving EUR600 million over the
next two years starting January. Mr. Mayrhuber said the restructuring will
be carried in more than one season, but the company's strategy will not
change completely.
Thomas posted a EUR120 million after-tax net loss for 2001/2002. In July
the company said there could be deeper job-cuts at its
German locations. In June it said it would reduce its fleet by as many as
13 planes.
WATERFORD WEDGWOOD: Junks Dividend; Cites EUR12 Mln Pre-tax Loss
----------------------------------------------------------------
Statement of Chairman Sir Anthony O'Reilly
Trading at Waterford Wedgwood has been substantially improving since June.
At constant exchange rates, the Group's fiscal second quarter sales were
equal to last year, a significant improvement over first quarter sales,
which were 9% down on last year. In September, which is the beginning of
the holiday season that leads up to Christmas, sales were 3% ahead of last
year at constant exchange rates.
As we pointed out at our Annual General Meeting, an unusual confluence of
events assured that the first quarter of this fiscal year would be
challenging: the conflict in Iraq, its aftermath and fears of a SARS
epidemic raised difficulties for virtually all luxury goods businesses.
Naturally, earnings in our first quarter were affected by the resulting
volume loss, leading to an operating loss of EUR11.9 million. We are
encouraged, however, by the fact that improving sales in the second quarter
have reversed this first-quarter under-performance and allowed us to
generate an operating profit of EUR16.1 million in the months of July,
August and September. Consequently, the Group recorded an operating profit
of EUR4.2 million for the six months to September 30, 2003; first half
EBITDA before restructuring charges was EUR22.7 million (2002: EUR60.7
million). This year on year variance was caused mainly by lower sales
volumes, lower capacity utilization and by adverse exchange movements.
Benefits from restructuring programs
During the first half of this year, we continued to focus on our fixed cost
base by implementing restructuring and outsourcing programs and by investing
in cost saving technology. These programs include the closure of two
factories in England, the shrinking of the Group's workforce by some 1000
people this year and the outsourcing of our entire Johnson Brothers
production to Asia at significantly enhanced profit margins.
These programs, all completed at a once-off cost, are on track and are
expected to generate total annual cost savings of EUR38.5 million.
EUR2million was achieved in the first half and EUR14 million is expected to
be achieved in the second half of this fiscal year.
The first Johnson Brothers products from the new Far Eastern sources are
already in the market. At the same time we have completed, on budget and on
schedule, the periodic re-build of our continuous-melt tank furnace in
Waterford, an investment in Waterford of EUR15.5 million.
To see financial results: http://bankrupt.com/misc/Waterford_Tables.htm
Total Group sales of EUR405.8 million were 3.7% down at constant exchange
rates (13.9% down at prevailing rates; 2002: EUR471.2 million). Operating
profit was EUR4.2 million (2002: EUR40.6 million) with first half EBITDA
before restructuring charges at EUR22.7 million (2002: EUR60.7 million).
The difference compared with the same period last year was caused mainly by
lower sales volume, lower capacity utilization and by adverse exchange
movements. Pre-tax loss before exceptional restructuring costs was EUR12.1
million (2002: profit of EUR24.5 million on a comparable basis);
additionally, a one-off exceptional charge of EUR32.7 million for these
previously announced restructuring programs has been included in these
financial results. Loss per share was 0.85 cent (2002: earnings 3.12 cent).
In the light of first half trading, the Board is not recommending payment of
an interim dividend.
We have fixed our effective U.S.$/EUR rate for this fiscal year at $1.10 by
selling forward our dollar revenues.
Sector Overview
Crystal
The Group's crystal brands recorded sales of EUR135.4 million (2002:
EUR158.9 million), down 3.9% at constant exchange rates (14.8% at prevailing
rates) due to difficult first quarter trading, particularly in the Unites
States. However, there were some notable successes. Waterford Crystal's
co-branding alliances continue to flourish. Sales of our John Rocha and
Jasper Conran crystal collections grew by a combined 34%. Bold new product
programs were enthusiastically welcomed at a major trade show in New York at
the end of October. These include Evolution by Waterford, Waterford
Crystal's stunning new collection of imposing, hand-made colored glass
pieces for the home. Waterford Great Room follows on the striking success
of Waterford Fine China with a superbly designed and crafted collection of
casual products for everyday luxury living. We have completed, on budget
and on schedule, the re-build of our continuous-melt tank furnace in
Waterford, a EUR15.5 million investment in refurbishment and cost-saving
technology.
Ceramics
Sales of ceramic products were EUR170.3 million (2002: EUR211.1 million),
down 12.3% at constant exchange rates and 19.3% at prevailing rates, as the
European ceramics market continued to prove difficult. Despite this, the
combined Waterford and Wedgwood share of the U.S. formal china market has
grown from 21.5% to 24.5%, placing the Group a strong and rapidly growing
second in the vast U.S. market. The U.S. has seen continued success with
'Vera Wang at Wedgwood' which continues to grow at a significant rate.
Furthermore, we have seen increased consumer confidence and spend in Asia in
recent months. Sales performance from the 'Jasper Conran at Wedgwood' range
in the U.K. continues to expand. The first Johnson Brothers products from
the new Far Eastern sources are now in the market. At the end of October,
Wedgwood launched its marvelous new flagship store on Regent Street, London,
which has been very well received.
Premium cookware
Premium cookware sales were EUR50.0 million (2002: EUR59.7 million), down
just 0.8% at constant exchange rates and 16.2% at prevailing rates.
All-Clad sales in the US have been resilient in a difficult market
environment. Spring, our European premium cookware brand, has now been
fully integrated into the Group and firmly leads our entry in the premium
cookware market in Europe.
Other products
Our other products sales grew to EUR50.1 million (2002: EUR41.5 million), an
increase of 38.8% at constant exchange rates and 20.7% at prevailing rates.
Our W-C Designs linen business grew 8.5% at constant exchange rates while
sales of our Waterford Holiday Heirlooms more than doubled.
Sales Channels
We greatly value our longstanding relationships with our department store
partners, relationships which we anticipate will continue to grow and
prosper.
At the same time, the Group has been steadily diversifying its sales channel
base through productive collaborations with rapidly growing lifestyle
retailers such as Williams Sonoma and others. It is anticipated that this
trend will continue.
WATERFORD WEDGWOOD: Turns to Capital Markets to Repay Debt
----------------------------------------------------------
Following a strategic review of our requirements in light of current
economic and business conditions, the Board of Directors [of Waterford
Wedgwood] has decided to implement a new capital structure which will enable
the Group to focus on maximizing the long-term value of our brands. The
capital structure reduces total and senior leverage and will include a
rights issue, a bond issue and a new senior debt structure.
The components of Waterford Wedgwood's new capital structure are:
(a) Rights Issue: the Group proposes to offer to qualifying stockholders 3
new stock units for every 11 stock units held in a rights issue at a price
of 18 cent (euro) per new stock unit, representing a discount of 38%
relative to the closing market price of 29 cent (euro) on the Irish Stock
Exchange on
November 13, 2003. This will result in the issuance of approximately 213
million new stock units, which will raise EUR35.7 million, net of expenses,
of new equity for the Group. The major shareholders, the O'Reilly and
Goulandris families, have undertaken to participate in the rights issue to
the full extent of their combined entitlements, representing 24.6% of the
issued share capital of the Company.
The rights issue is fully underwritten by Davy Stockbrokers and is
conditional on the successful completion of the bond, as well as agreement
for an amended revolving credit facility and private placement notes.
The allotment of the new stock units under the rights issue will be within
the Group's existing authorities and share capital headroom and will not
therefore require stockholder approval. It is expected that the conditions
of the rights issue will be satisfied on or around December 2, 2003 (and in
any event, no later than December 5, 2003). Rights Issue documents will
then be posted to qualifying stockholders.
(b) Bond: the Group proposes to raise EUR165 million of subordinated debt
through the capital markets
(c) New Senior Debt Structure:
(i) amended revolving secured credit facility with its
existing lenders for an amount of EUR224.0 million, down
from EUR338.4 million, with a maturity date of March 31,
2008
(ii) amended U.S. Private Placement notes of US$62.9 million
(EUR53.8 million), down from US$95 million (EUR81.2
million)
(iii) partial repayment of other senior debt facilities
Current Trading
We are definitely beginning to see a bounce come back into the consumer's
step - particularly in our important U.S. and Japanese markets.
In September, the beginning of the holiday season leading up to Christmas,
our sales were 3% up on last year (at constant exchange rates). Our October
sales again were up 3% (at constant exchange rates). In the U.S., which
accounts for over 50% of our worldwide business, combined Waterford and
Wedgwood sales were up 8% versus last year in the second quarter, having
been down by 12% in the April to June quarter at constant exchange rates.
The United States Christmas selling season is always important. Given this
encouraging improvement in trading in September and October, and signs of an
encouraging early start to November, we are optimistic of a stronger
Christmas this year.
We are greatly encouraged by our improving sales trends, the signals that a
meaningful recovery in U.S. retail sales is starting to take hold, and the
enhanced profit margins which should flow from our important restructuring
and productivity programs. We have confidence for the Group's prospects for
the second half.
This outlook, combined with the Group's proposed new capital structure
announced, confirms our belief that, having weathered the economic
uncertainties of the markets over the last two years, Waterford Wedgwood is
now much better positioned to take advantage of the upturn in economic
activity.
To see financial statements:
http://bankrupt.com/misc/Waterford_Financials.htm
WATERFORD WEDGWOOD: Assigned 'B+' Ratings; Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term corporate
credit rating to Ireland-based luxury table- and dinnerware manufacturer
Waterford Wedgwood PLC. The outlook is stable.
In addition, Standard & Poor's also assigned its 'B-' debt rating to the
proposed contractually subordinated EUR165 million mezzanine notes to be
issued by Waterford Wedgwood.
The ratings are conditional on the completion of a EUR38.5 million equity
issue, as announced on Nov. 14, 2003, which forms part of the group's
recapitalization.
"The ratings reflect Waterford Wedgwood's highly leveraged financial
profile, as well as the seasonality, cyclicality, and maturity of the niche
upmarket tableware markets in which it operates," said Standard & Poor's
credit analyst Hugues de la Presle. "These factors are, however, partially
offset by the group's well-established positions, underpinned by strong
brands, in its key crystal, ceramics, and premium cookware markets, and by
its geographical diversity."
Adjusted for operating leases and EUR162 million of posttax, postretirement
liabilities, net debt pro forma for the recapitalization was about EUR624
million, at Sept. 30, 2003.
"It is expected that Waterford Wedgwood should gradually deleverage, thanks
to lower operational gearing following the completion of its major
restructuring program, and reduced investments and dividends," said Mr. de
la Presle.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Shareholders Total Working
Equity Assets Capital
Ticker (US$MM) (US$MM) (US$MM)
------ ----------- ------ --------
AUSTRIA
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Libro AG (111) 174 (182)
BELGIUM
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CZECH REPUBLIC
--------------
Ceskomoravska Kolben &
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DENMARK
-------
Elite Shipping (28) 101 19
FRANCE
------
Banque Nationale
de Paris Guyane (41) 352 N.A.
BSN Glasspack (101) 1,151 179
Bull SA BULP (760) 893 (130)
Compagnie
des Machines Bull (116) 136 (20)
Compagnie Francaise de
l'Afrique Occidentale (65) 256 21
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European Computer System (110) 682 377
Grande Paroisse SA (927) 629 330
Pneumatiques Kleber SA (34) 480 139
SDR Picardie (135) 413 N.A.
Soderag (3) 404 N.A.
Sofal SA (305) 6,619 N.A.
Spie-Batignolles (16) 5,281 75
St Fiacre (FIN) (1) 111 (33)
Trouvay Cauvin TRCN (0) 134 10
Usines Chauson (23) 249 35
GERMANY
-------
Dortmunder
Actien-Brauerei DABG (13) 118 (29)
F.A. Guenther & Sohn AG GUSG (8) 111 N.A.
Kaufring AG KAUG (19) 151 (51)
Nordsee AG (8) 195 (31)
Schaltbau AG SLTG (16) 163 20
Vereinigter
Baubeschlag-Handel
Holding AG VBHG (24) 307 (63)
ITALY
-----
Binda SpA BND (11) 129 (20)
CIRIO FINANZIARI CBDI (422) 1,583 (396) Credito
Fondiario
e Industriale SpA CRF (200) 4,218 N.A.
Lazio SpA (57) 495 (330)
NETHERLANDS
-----------
Baan Company N.V. BAAN (8) 610 46
NORWAY
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Pan Fish ASA PAN (117) 806 (259)
Petroleum-Geo Services PGO (32) 2,963 (5,250)
POLAND
------
Animex SA (1) 108 (86)
Exbud Skanska SA EXBUF (9) 315 (330)
Stalexport SA (57) 229 (51)
SPAIN
-----
Altos Hornos de Vizcaya SA (116) 1,283 (278)
Santana Motor SA (46) 223 41
Sniace SA (11) 128 (24)
Tableros de Fibras SA TFI (43) 2,107 125
SWITZERLAND
-----------
Kaba Holding AG KABZN (47) 572 278
UNITED KINGDOM
--------------
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Booker Plc BKRUY (60) 1,298 (8)
Bradstock Group BDK (2) 269 5
Brent Walker Group (1,774) 867 (1,157)
British Energy BGY (5,342) 3,438 229
British Nuclear Fuels Plc (2,627) 36,359 1,948
British Sky Broadcasting BSY (175) 3,347 (144)
Compass Group CPG (668) 2,972 (298)
Costain Group COST (34) 329 (12)
Dawson Holdings DWSN (32) 135 (25)
Easynet Group Plc ESY (12) 332 53
Electrical and Music EMI
Industries Group (885) 3,053 (435)
Euromoney Institutional ERM (119) 173 20
Gallaher Group GLH (543) 5,527 68
Gartland Whalley (11) 145 (8)
Global Green Tech Group (156) 408 (18)
Heath Lambert
Fenchurch Group PLC (10) 4,109 (10)
HMV Group PLC HMV (211) 762 (66)
Imperial Tobacco Group ITY (117) 10,083 (190)
Intertek Testing Services ITRK (134) 425 67
IPC Media Ltd. (685) 254 16
Lambert Fenchurch Group (1) 1,827 3
Lattice Group (1,290) 12,410 (1,228)
Misys PLC MSY (161) 949 41
Orange PLC ORNGF (594) 2,902 7
Regus PLC RGU (46) 367 (60)
Rentokil Initial Plc RTO (1,130) 2,809 (37)
Saatchi & Saatchi SSI (119) 705 (41) Seton
Healthcare (11) 157 0
Yell Group PLC (196) 3,964 289
Each Tuesday edition of the TCR-Europe contains a list of companies with
insolvent balance sheets based on the latest publicly available balance
sheet available to our editors at the time of publication. At first glance,
this list may look like the definitive compilation of stocks that are ideal
to sell short. Don't be fooled. Assets, for example, reported at
historical cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which equity
securities trade in public market are determined by more than a balance
sheet solvency test.
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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.
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