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/raid1/www/Hosts/bankrupt/TCREUR_Public/031205.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 Friday, December 5, 2003, Vol. 4, No. 241 Headlines F R A N C E ALCATEL SA: Shifts Focus to Mobile Communications RHODIA SA: 200 More Employees to go in Latest Redundancy VIVENDI UNIVERSAL: Vodafone Chief Not Ruling out Takeover G E R M A N Y DAIMLERCHRYSLER AG: Investor Wants US$3 Bln for 1998 'Deception' HVB GROUP: Activest Mutual Fund Unit in Auction List I R E L A N D SHORTS: Amicus Members Finally End Protest Action I T A L Y ALITALIA SPA: Commissions to Travel Agencies Cut by 1% L U X E M B O U R G STOLT OFFSHORE: Oceaneering Acquires Drill Support Business N E T H E R L A N D S HAGEMEYER N.V.: ABN AMRO Buys Hedge Funds for US$150 Million N O R W A Y NORTON WAVERLY: Meeting of Creditors Scheduled December 16 R U S S I A YUKOS OIL: Govt Files US$5 Bln Claim for Unpaid Taxes, Penalties S W I T Z E R L A N D DEGUSSA AG: Concludes Talks over Radebeul Plant Closure SWISS LIFE: Issues Securities to Reduce Interest in Subsidiary U N I T E D K I N G D O M BRITISH AIRWAYS: Non-premium Traffic Up 8.4% Year-on-year BALACLAVA PUB: Creditors Meeting Set December 16 COALPOWER: Trading Losses, Cash Flow Pressures Force Collapse FIRST ACTIVE: Antitrust Regulator Approves Merger with Ulster HENDERSON ABSOLUTE: Board Decides to Pursue Firm's Wind Up HENDERSON ABSOLUTE: Sets Extraordinary General Meeting Dec. 19 HENDERSON ABSOLUTE: Shares to Cease Trading December 16 INTERTEK GROUP: Operating Profit Lags Turnover LE MERIDIEN: Hilton Could Run Waldorf Operations Within 24 Hours MG ROVER: Union Appoints Expert to Scrutinize Books MG ROVER: Car Sales Dip Following Row over Directors' Trust Fund NETWORK RAIL: Costs of Government-backed Loan Could Double RAILTRACK PLC: Shareholders Demand Fair Compensation from Govt RANK GROUP: Offers New Debt to Refinance Guaranteed Bonds ROOM SERVICE: Short-selling Stirs Further Troubles ROOM SERVICE: Confirms Details Relating to Chiddingfold's Offer ROYAL & SUNALLIANCE: Sells Stake in La Construccion to La Camara ********* =========== F R A N C E =========== ALCATEL SA: Shifts Focus to Mobile Communications ------------------------------------------------- The senior management team of Alcatel CIT, Alcatel's (Paris : CGEP.PA and NYSE : ALA) main subsidiary in France, proposed to union representatives in a meeting to open negotiations regarding a redeployment and adaptation plan for 2004. The goal of the plan is to find solutions for the decrease in fixed-line network and optics activities and at the same time to meet the needs of the increase in the mobile communications activity due to new product and applications development and to the ramp-up of UMTS activity. It is a two-part plan: The first part concerns the decline in activities and affects approximately 470 jobs. An extension of the October 2002 workforce reduction plan conditions is proposed. This plan is based on voluntary departures, principally pre-retirement measures. The second part includes: (a) The acceleration of transferring work currently carried out on Alcatel sites in the Paris region to sites in Lannion (on the northern coast of Brittany) and Orvault (near Nantes). Teams, particularly in R&D, in Lannion and Orvault are now available because of the decrease in fixed-line networks and optics activities; (b) The redeployment of fixed network and optics teams, previously dedicated to this work, to UMTS development in Velizy (south of Paris); (c) The distribution of activities from the Nanterre site among the Colombes, Velizy (near Paris), and Ormes (near Orleans) sites; and (d) The increase of the training budget by nearly 50% to pay the retraining programs that will accompany the internal redeployments that will result from these changes. This part concerns approximately 900 employees. This is in addition to the 400 employees already involved in internal mobility programs in 2003. As of today, Alcatel CIT employs 7,600 people. About Alcatel Alcatel provides end-to-end communications solutions, enabling carriers, service providers and enterprises to deliver content to any type of user, anywhere in the world. Leveraging its long-term leadership in telecommunications network equipment as well as its expertise in applications and network services, Alcatel enables its customers to focus on optimizing their service offerings and revenue streams. With sales of EUR16.5 billion in 2002, Alcatel operates in more than 130 countries. RHODIA SA: 200 More Employees to go in Latest Redundancy -------------------------------------------------------- Troubled French chemicals company, Rhodia S.A., is planning another round of job-cuts, Intesatrade reported, citing Les Echos. A source with the CFDT union said 200 more employees will lose their jobs in addition to the 1,000 announced last month. Rhodia, which produces chemicals used in industries ranging from pharmaceuticals to plastics and food additives, is currently carrying out a plan of action involving a refocusing of the business portfolio, cost reduction and the Group's financial structure. The aim is to enable the Group to weather the unfavorable economic cycle and benefit fully from the recovery in the chemical sector when it occurs. Ratings for the company have been downgraded several times, the most recent of which is from Moody's Investors Service which lowered its Senior Implied rating for Rhodia from 'Ba2' to 'B1', and its senior unsecured and senior subordinated debt ratings to 'B2' from 'Ba2', and 'B3' from 'Ba3', respectively. The outlook for the ratings is negative. VIVENDI UNIVERSAL: Vodafone Chief Not Ruling out Takeover --------------------------------------------------------- Vodafone Chief Executive Arun Sarin said he is considering buying the whole of Vivendi Universal in order to get access to SFR, the mobile operator controlled by the French media group, according to the Financial Times. He said the option is not on top of his company's priority, but he is not ruling it out. Mr. Sarin is speaking at a Foreign Press Association meeting in London. The statement, which was subsequently downplayed by the company, appeared to divert from the mobile operator's strategy with regards to his plans for SFR, the report noted. Vodafone has always been open about his plans to gain control of SFR, France's second largest mobile operator, which it owns jointly with Vivendi. It made an attempt to purchase stakes in SFR owned by BT Group and SBC Communications of the U.S. last year, but lost the battle to Vivendi. The failure left France as the only significant European market where Vodafone lacks majority control. Vodafone would have to deal with a number of non-telecommunications assets that it would be unlikely to want to keep should it take over Vivendi. One of these businesses is a stake in French satellite television operator Canal Plus. But the mobile operator is understood to have found at least one interested party willing to help it out of possible political problems related to the acquisition. ============= G E R M A N Y ============= DAIMLERCHRYSLER AG: Investor Wants US$3 Bln for 1998 'Deception' ---------------------------------------------------------------- Billionaire Kirk Kerkorian, formerly Chrysler's largest investor, insisted at a court hearing on Tuesday he was "deceived" by Daimler-Benz AG about its 1998 combination with Chrysler Corporation, according to Bloomberg. He said he agreed to the transaction thinking of the benefits of the seemingly favorable combination of the German and U.S. business, not knowing it was a takeover rather than a merger. Mr. Kerkorian is seeking as much as US$3 billion in damages over stock losses when the promised results of the DaimlerChrysler combination did not materialize. DaimlerChrysler's shares have fallen 55% since the transaction was completed in November 1998. His case is being heard by U.S. District Judge Joseph J. Farnan Jr. DaimlerChrysler's lawyers, meanwhile, accused Mr. Kerkorian of using the automaker the scapegoat for his decision to hold the company's shares while their value dropped, according to the report. The company estimates he has made US$2.7 billion as a result of the merger. They also said Mr. Kerkorian was keen to dispose his investment in Chrysler because of lack of confidence in the board of directors. But the 86- year-old investor denied the allegations. HVB GROUP: Activest Mutual Fund Unit in Auction List ---------------------------------------------------- HVB Group Chief Executive Officer Dieter Rampl could add the German bank's Activest mutual fund unit in his string of disposals since joining the company in January. There is a plan to sell the division for as much as EUR650 million (US$778 million) people familiar with the situation, but refused to be identified, according to Bloomberg. Germany's second-largest bank is believed to have hired Credit Suisse First Boston to help with the sale, and discussions with potential buyers from the U.S. and Britain are ongoing. The talks could take as long as three months, they said. Commerzbank AG Chief Executive Officer Klaus-Peter Mueller indicated his bank would be interested in buying the business a month after Mr. Rampl said he was reviewing whether to sell Activest, Germany's sixth-largest mutual fund company. He is disposing assets to bolster the bank's capital shaken by EUR850 million in losses last year. Cornelia Klaila, a HVB spokeswoman, declined to comment on plans for Activest, according to the report. Activest is the bank's core asset management division with about EUR50 billion in assets. ============= I R E L A N D ============= SHORTS: Amicus Members Finally End Protest Action ------------------------------------------------- Members of Amicus, largest union at Belfast aerospace company Shorts, decided to call off a strike over pay and cost-cutting to pave way for substantive negotiations with the company. This follows an agreement between union leaders and company officials regarding the suspension of redundancies at the firm before the end of March, and the discussion of the controversial new afternoon shift which will replace a night shift which carries a higher overtime premium. Some 4,000 employees belonging to Amicus and the TGWU went on strike last week due to concerns regarding the introduction of afternoon shifts and fears over redundancies. The dispute is part of a six-month old row with the company after Shorts workers narrowly rejected a four-year pay deal. Talks to end a strike by the smaller TGWU were continuing Tuesday. ========= I T A L Y ========= ALITALIA SPA: Commissions to Travel Agencies Cut by 1% ------------------------------------------------------ A re-launch plan of Italian carrier Alitalia S.p.A. includes a reduction of the commissions that the carrier pays to travel agencies, Intesatrade reported, citing a source close to the company. The source, Alitalia will cut commissions of both domestic and international flights by 1% starting February. The measure, which is part of a restructuring plan aimed at cutting costs to pave the way for an alliance with Air France Group and KLM Royal Dutch Airlines, could save the company some EUR170 million. Alitalia currently pays a 3% commission to travel agencies on its domestic flights and a 7% fee on international flights. =================== L U X E M B O U R G =================== STOLT OFFSHORE: Oceaneering Acquires Drill Support Business ----------------------------------------------------------- Stolt Offshore S.A. (NasdaqNM: SOSA; Oslo Stock Exchange: STO) announced Wednesday that it has signed Heads of Agreement with Oceaneering International Inc. for the sale of its ROV drill support business, consisting of a fleet of Remotely Operated Vehicles and their ancillaries, together with related contracts and employees. The transaction, which has a value of approximately US$50 million before minority interests, is subject to due diligence. Tom Ehret, Chief Executive Officer of Stolt Offshore S.A., said, "This sale is part of our program of disposals of non-core assets and businesses. It includes drill support Remotely Operated Vehicles' and contracts in place in the North Sea, The Americas, and West Africa. Stolt Offshore will continue to be a major operator of Remotely Operated Vehicles' in relation to our offshore construction business. We are happy to see our Remotely Operated Vehicles drill support employees and assets going to a market leader in this segment." Stolt Offshore is a leading offshore contractor to the oil and gas industry, specializing in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas. CONTACT: STOLT-OFFSHORE SA Julian Thomson/Fiona Harris Phone: U.S. +1 877 603 0267 (toll free) U.K. +44 1224 718436 E-mail: julian.thomson@stoltoffshore.com Patrick Handley Phone: U.K. +44 207 396 5395 E-mail: phandley@brunswickgroup.com Tim Payne Phone: U.S. +1 212 333 3810 E-mail: tpayne@brunswickgroup.com ===================== N E T H E R L A N D S ===================== HAGEMEYER N.V.: ABN AMRO Buys Hedge Funds for US$150 Million ------------------------------------------------------------ Some US$150 million in subordinated debt of troubled services group Hagemeyer has been bought by Dutch banking group ABN Amro, Reuters news agency reported Wednesday, citing a banking source. "ABN Amro bought out the hedge funds that were refusing any debt restructuring," the banker said. The U.S. hedge funds were blocking a rescue deal essential to Hagemeyer's survival. The source said that ABN AMRO favors keeping Hagemeyer independent after a debt-for-equity swap, which would mean creditors would forgive some of the debt. Commenting on an article from the Het Financieele Dagblad indicating that ABN AMRO had bought US$150 million in subordinated loans at 40-50% of face value from other investors, the source said the price was higher than that. ABN AMRO is the biggest bank in the Netherlands and already the lead bank in a group of institutional investors at Hagemeyer. Hagemeyer's net debt rose to EUR973 million (US$1.2 billion) by end-September from EUR896 million in June. It has forecast drain cash the rest of the year. =========== N O R W A Y =========== NORTON WAVERLY: Meeting of Creditors Scheduled December 16 ---------------------------------------------------------- Notice is hereby given pursuant to Section 98 of the Insolvency Act 1986 that a meeting of creditors will be held at RSM Robson Rhodes LLP, St George House, 40 Great George Street, Leeds LS1 3DQ on December 16, 2003 at 3.10 p.m. for the purpose of having a statement of the company's affairs laid before them, and for the purpose, if thought fit of nominating joint liquidators and appointing a liquidation committee or, if no committee, to agree the basis of the liquidators' remuneration. The meeting may also receive information about, or be called upon to approve, the costs of preparing the statement of affairs and convening the meeting. Creditors wishing to vote at the meeting must lodge a proxy, together with a statement of their debt, at the offices of RSM Robson Rhodes LLP, St George, 40 Great George Street, Leeds LS1 3DQ, not later than 1200 hours noon on December 15, 2003. A list of names and addresses of the company's creditors will be available for inspection, free of charge, at the offices of RSM Robson Rhodes LLP, St George, 40 Great George Street, Leeds LS1 3DQ on December 12 and 15, 2003 between the hours of 1000 and 1600 hours. David John Kirkham, Director =========== R U S S I A =========== YUKOS OIL: Govt Files US$5 Bln Claim for Unpaid Taxes, Penalties ---------------------------------------------------------------- Russian oil company Yukos, whose ex-chief executive is being held on charges of fraud and tax evasion, faces the prospect of paying US$5 billion in outstanding taxes and penalties at the government's demand, according to the Financial Times. Citing reports from Interfax, the Financial Times said, Russia's deputy tax minister, Igor Golikov, has sent a letter to the general prosecutor claiming RUB85 billion in interest and penalties for alleged RUB65 billion (US$2.2 billion) underpayment in 1998-2003. Yukos strongly denied having evaded tax payments, the report said. The issue is a blow to the company's efforts to proceed with a US$11 billion merger with Sibneft. Some insiders saw it as a move to force Yukos shareholders to accept Sibneft's revised terms, according to the report. One sticking point to the transaction, which is already technically complete, is the appointment of a new board to the oil company after the resignation of former Chief Executive Mikhail Khodorkovsky. ===================== S W I T Z E R L A N D ===================== DEGUSSA AG: Concludes Talks over Radebeul Plant Closure ------------------------------------------------------- On November 26, 2003, the intensive negotiations between representatives of Degussa's management and the works council of the Degussa plant in Radebeul, near Dresden, were brought to a close, and the signing took place of a balance of interests agreement and transfer social plan. A staff meeting was held in this respect at the Radebeul plant on Tuesday, and the employees are now to be informed about the contents of the agreements in group talks and dialogs. In April 2003, the Degussa Management Board announced its intention of closing the location by the end of 2004 due to the difficult competitive situation in the fine chemicals segment and considerable excess capacity on the world market. From the very start, the joint intent in conducting the negotiations has been to implement the operational change in accordance with social responsibility considerations. For this reason, it has also been agreed to examine convincing and realistic alternatives to closing the location, and to find -- if possible and on a smaller scale, if necessary -- a sound and well-funded investor to run the location over the long term. With regard to the possible loss of jobs, the newly concluded transfer social plan includes a bespoke "transfer concept" involving a transfer company, as well as classical severance scheme elements. The concept is concerned with maintaining prospects of placing employees in jobs on the primary labor market beyond the intended closure date to the end of 2005. Accordingly, the goal of the transfer company is to provide the employees with demand-oriented training and to spare them joblessness by placing them in appropriate subsequent employment. Degussa and the works council have included the intended continuation of the renowned Radebeul training establishment under new management as a special topic in the balance of interests agreement and transfer social plan. Marked progress is to be made in the negotiations in December. Degussa is a multinational corporation consistently aligned to highly profitable specialty chemistry. With sales of EUR11.8 billion and a workforce of some 48,000, it is Germany's third-largest chemical company and the world market leader in specialty chemicals. In fiscal 2002, the corporation generated operating profits (EBIT) of more than EUR900 million. Degussa's core strength lies in highly effective system solutions that are tailored to the requirements of its customers in over 100 countries throughout the world. Degussa's activities are led by the vision "Everybody benefits from a Degussa product -- every day and everywhere". CONTACT: DEGUSSA AG Corporate Communications Hannelore Gantzer, Spokeswoman Phone: +49-211-65 041-368 SWISS LIFE: Issues Securities to Reduce Interest in Subsidiary -------------------------------------------------------------- Swiss Life Holding intends to reduce the minority shareholdings in its Swiss Life/Rentenanstalt subsidiary by buying up Swiss Life/Rentenanstalt shares (RAN), thus simplifying the shareholder structure. To realize this in the most efficient manner possible, the enterprise is bringing out a mandatory convertible securities (MCS) issue, which should raise up to CHF350 million in funds. At the Investors' Day event held for the first time, Swiss Life described its approach to asset and liability management, risk management and investment management. Swiss Life Holding means to simplify its shareholder structure. It intends to reduce the minority stake still held in its Swiss Life/Rentenanstalt subsidiary following the exchange of Swiss Life/Rentenanstalt shares (RAN) for shares in Swiss Life Holding (SLHN) which took place in 2002. The opportunity presents itself because the Fondiaria-SAI Group has offered to sell its 603 414 RAN shares (a 5.1% stake) to Swiss Life Holding. The purchase consideration amounts to CHF212 million, equivalent to a price of CHF351 per RAN share. In addition, OZ Bankers AG has served as intermediary for a further 237 706 RAN shares (a 2.0% stake). In this case the purchase price amounts to 1.55 times the share price of the SLHN share on the day of the bookbuilding for the mandatory convertible securities (December 17, or 18 2003). These transactions will give Swiss Life Holding ownership of 99.8% of the RAN shares. Swiss Life Holding will present an offer of equivalent value to the remaining minority shareholders. These transactions are being financed by a mandatory convertible securities issue to the maximum amount of CHF350 million. The mandatory convertible securities must be converted by December 30, 2004 into Swiss Life Holding shares drawn from the available conditional capital. The proceeds from the issue will count towards equity. Swiss Life Holding anticipates that the issuance of the mandatory convertible securities will reinforce the Group's equity on a consolidated basis and will have a neutral impact on earnings per share. In the words of Rolf Dorig, Chief Executive Officer: "Reducing the minority stake in Rentenanstalt will not only allow us to simplify our ownership structure, it will also give us greater flexibility when it comes to exploiting the advantages of our holding structure. The short-term convertible securities represent the most favorable means of executing the transactions, for both enterprise and shareholders alike." Details on the MCS Swiss Life Cayman Finance Ltd. will be issuing mandatory convertible securities (MCS II) to the maximum amount of CHF350 million, which are unconditionally and irrevocably guaranteed by Swiss Life Holding. In Switzerland and countries whose laws so permit, the mandatory convertible securities will initially be offered for advance subscription to entitled Swiss Life Holding shareholders by way of non-tradeable advance subscription rights (subscription period: December 9 to 16 2003, 12.00 CET). Swiss Life Holding shareholders registered prior to the commencement of exchange trading on December 9, 2003 are entitled to subscribe for one MCS II with a nominal value of CHF1000 for each 61 shares held. Any portion of the MCS issue not taken up by shareholders will be offered in an open bookbuilding procedure to institutional investors in Switzerland and other countries whose laws so permit. The bookbuilding procedure will be carried out on December 17 or 18 2003. The definitive terms and conditions (including issue amount, fixed coupon and conversion ratio) will be determined the same day. The MCS II conversion ratio is equivalent to CHF1000 divided by the share price of Swiss Life Holding shares on the day of the bookbuilding (conversion price). If not converted earlier, the MCS IIs will automatically be converted into Swiss Life Holding shares on December 30, 2004. From February 9, 2004 until December 15, 2004 each MCS II can be prematurely converted into Swiss Life Holding shares. The issuer will pay a fixed coupon amount of at least 1.00%, payable on December 30, 2004, plus an additional amount equivalent to any dividend for those shares to which the holder is entitled on the basis of the MCS II conversion ratio. The floating coupon component is payable on the date on which any dividend is paid to shareholders. In the event of early conversion by the investor, entitlement to payout of the coupon amount is forfeited. Payments for allocated MCS IIs will become due on December 30, 2003. Application will be made for an MCS II listing on the main board of the SWX Swiss Exchange. Credit Suisse First Boston is acting as sole lead manager and bookrunner for the MCS II issue and guarantees the issuer minimum proceeds from the issue of CHF240 million. First-ever Investors' Day At the Investors' Day Swiss Life informed financial analysts and institutional investors about the progress made in realizing its new strategy and offer an in-depth look at its concepts, methods and processes with reference to asset and liability management, risk management and investment management. In his introduction to the event Rolf Dorig, Chief Executive Officer, explains the state of the restructuring as follows: "We have already shed 1500 positions by the end of October 2003, taking us to where we originally wanted to be by the end of 2004. We are slightly ahead of schedule in terms of cost reductions, too. There was a roughly 4% drop in premium volume as of the end of October in comparison with the same period of the previous year. Growth in all our other core markets is not sufficient to offset the noticeable fall in premium volume in Switzerland as a result of the measures taken to make business profitable. We will close the 2003 financial year with a profit, and we are adhering to our medium-term goals." Bruno Pfister, Chief Financial Officer, discusses asset and liability management. In this area the main focus is on matching assets and liabilities, so that the balance sheet is immuned against interest rate fluctuations from an economic viewpoint, while also taking into account all other relevant factors such as regulatory requirements, solvency regulations, accounting standards, and the rating agencies' liquidity and capital requirements. Michael Koller, Chief Risk Officer, takes an in-depth look at the risk aspects of life insurance (valuation methods, risk measurement and management, pricing models and regulatory requirements). Martin Senn, Chief Investment Officer, explains where Swiss Life stands on the three priority objectives in the area of investments: simplifying the structure, reducing risks and bringing the investment process into line with ALM concepts. In this context he also looks at how the equity exposure, which stood at 2.1% (after hedging) at the end of November, has fared in the current year. All Investors' Day presentations can be downloaded at http://www.swisslife.comfrom 07.30 CET. Swiss Life The Swiss Life Group is one of Europe's leading providers of life insurance and long-term savings and protection. The Swiss Life Group offers individuals and companies comprehensive advice and a broad range of products via agents, brokers and banks in its domestic market, Switzerland, where it is market leader, and selected European markets. Multinational companies are serviced with tailor-made solutions by a network of partners in over fifty countries. Swiss Life Holding, registered in Zurich, was founded in 1857 as the Swiss Life Insurance and Pension Company. Shares of Swiss Life Holding are listed on the SWX Swiss Exchange (SLHN). The enterprise employs around 11 000 people worldwide. CONTACT: SWISS LIFE Investor Relations Phone: +41 1 284 52 76 E-mail: investor.relations@swisslife.ch Home Page: http://www.swisslife.com =========================== U N I T E D K I N G D O M =========================== BRITISH AIRWAYS: Non-premium Traffic Up 8.4% Year-on-year --------------------------------------------------------- In November 2003, passenger capacity, measured in Available Seat Kilometers, was 2.3% above November 2002 and traffic, measured in Revenue Passenger Kilometers, was higher by 7.4%. This resulted in a passenger load factor up 3.4 points versus last year, to 71.8%. The increase in traffic comprised a 2.5% increase in premium traffic and an 8.4% increase in non-premium traffic. Non-premium traffic has benefited from promotional activities principally in the U.S. and the Rugby World Cup in Australia. Cargo, measured in Cargo Ton Kilometers, rose by 10.9%. Overall load factor rose 3.0 points to 69.7%. Market conditions Market conditions continue to point to a more stable outlook for revenue, with traffic volumes remaining sensitive to yield. The longhaul premium volume improvements seen last month continue. Strategic Developments British Airways announced a pre-tax profit of GBP105 million (2002: GBP245 million) for the three months ended September 30, 2003. The three-month pre-tax figures took the result for the half-year to GBP60 million profit. Lord Marshall of Knightsbridge announced his intention to retire as chairman of British Airways at the company's next annual general meeting on July 20, 2004. He will be succeeded as chairman by Martin Broughton, 56, currently senior independent director who was appointed deputy chairman by the board with immediate effect. The three-year actuarial valuation, to determine the funding position of British Airways' two main U.K. pension schemes -- Airways Pension Scheme and the New Airways Pension Scheme -- was completed. The Airways Pension Scheme surplus of GBP820 million at the last valuation in March 2000, has fallen to GBP45 million and the New Airways Pension Scheme deficit has risen from GBP221 million at March 2000 to GBP928 million at March 2003. The government minimum funding requirement is covered in both schemes. Annual contributions of GBP26 million for Airways Pension Scheme are required from November 2003. For New Airways Pension Scheme, contributions will increase by GBP107 million a year to GBP225 million effective January 2004. The Concorde fleet was positioned to museums around the world including Barbados, Seattle, New York, Manchester and Bristol. Glasgow-based Loganair is to operate seven Scottish routes currently served by British Airways' wholly owned subsidiary British Airways CitiExpress, between the Scottish mainland and the island communities of Benbecula, Shetland and Stornoway. The transfer of the routes, together with the lease of four Advanced Turbo Prop aircraft, is part of British Airways CitiExpress strategy to accelerate its move towards an all-jet aircraft operation, simplifying its fleet and taking unnecessary cost from the business. By March next year British Airways CitiExpress, will stop flying its remaining fleet of eight Advanced Turbo Props. British Airways announced plans to launch services to Algiers from London Gatwick on January 5, 2004. Flights will operate on Mondays, Wednesdays and Fridays on a Boeing 737. Three new routes to three Italian destinations, Bari, Cagliari and Catania, will also start next summer. In addition, changes to the bilateral air services agreement between the U.K. and Libya have enabled the airline to increase its weekly frequency between London Heathrow and Tripoli, from three to four flights, from November 30, 2003. It is hoped to increase services further next summer. To view table: http://bankrupt.com/misc/British_Airways_Statistics.pdf BALACLAVA PUB: Creditors Meeting Set December 16 ------------------------------------------------ Notice is hereby given pursuant to Section 48(2) of the Insolvency Act 1986, that a meeting of the unsecured creditors of Balaclava Pub Company Limited, Hobgoblins Limited, and Hobgoblins Group Limited (all in administrative receivership) will be held at Holiday Inn Oxford, Peartree Roundabout, Woodstock Road, Oxford OX2 8JD on December 16, 2003 at 11.00 a.m. for the purpose of having laid before it a copy of the report prepared by the Joint Administrative Receivers under section 48 of the said Act. The meeting may, if it thinks fit, establish a creditors' committee to exercise the functions conferred on it, by, or under the Act. Creditors are only entitled to vote if: (a) they have delivered to us at the offices of RSM Robson Rhodes, 186 City Road, London EC1V 2NU, no later than 1200 hours on the business day before the meeting, written details of the debts they claim to be due, and the claim has been duly admitted under the provisions of the Insolvency Rules 1986; and (b) there had been lodged with us any proxy which the creditor intends to use on his behalf. CONTACT: Michael Jonathan Christopher Oldham Simon Peter Bower Joint Administrative Receivers COALPOWER: Trading Losses, Cash Flow Pressures Force Collapse ------------------------------------------------------------- Accountants Ernst & Young were called in to run Coalpower, the company that operates Hatfield Colliery near Doncaster. The administrators say the collapse of Coalpower follows a "sustained period of trading losses and cash flow pressures." Joint administrator Hunter Kelly explained: "The colliery has suffered financially in recent years as a result of geological and mechanical problems on the existing coal face, which has led to significantly lower levels of production than anticipated." According to The Independent, Coalpower has lost in the order of GBP14 million since it was set up two years ago for the purpose of rescuing Hatfield. It had recently won conditional approval for a GBP15 million-government grant to help it stay open, but Coal Authority, which is owed GBP1.6 million, called in administrators because of the sustained losses. Ernst & Young emphasized that the wages for all 220 employees would be paid and said they were "hopeful" that a buyer would come forward "in the short term". An assessment of the mine's viability over the coming weeks will be conducted, and "intensive marketing exercise" is ensured for the colliery's sale. Richard Budge, Coalpower's chairman and managing director, is expected to be among potential bidders for the business. FIRST ACTIVE: Antitrust Regulator Approves Merger with Ulster ------------------------------------------------------------- First Active plc announces that The European Commission has decided not to oppose the Acquisition of the Company by Ulster Bank Limited and has declared it compatible with the common market and with the EEA Agreement. Responsibility Statement The directors of First Active accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of First Active, the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of RBS accept responsibility for the information contained in this announcement insofar as it relates to members of the RBS Group. To the best of the knowledge and belief of the directors of RBS, the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. JPMorgan and Davy Corporate Finance are acting for First Active and no-one else in connection with the Acquisition and will not be responsible to anyone other than First Active for providing the protections afforded to clients of JPMorgan and Davy Corporate Finance or for providing advice in relation to the Acquisition. Merrill Lynch is acting for RBS and no one else in connection with the Acquisition and will not be responsible to anyone other than RBS for providing the protections afforded to clients of Merrill Lynch or for providing advice in relation to the Acquisition. Terms defined in the Scheme Circular have the same meaning in this announcement. HENDERSON ABSOLUTE: Board Decides to Pursue Firm's Wind Up ---------------------------------------------------------- On August 7, 2003, the Board of Henderson Absolute Return Portfolio Limited announced its intention to provide Shareholders with proposals relating to a voluntary liquidation of the Company. On October 29, 2003, the Board announced that it had become aware of a number of Shareholders who wished to remain invested in a fund with a similar investment policy to the Company, on which basis the Board was recommending that the Company be wound up and reconstructed. It has now become clear that insufficient Shareholders wish to continue their investment in this way. The Board is therefore proposing the winding-up of the Company. Background to the Proposals In a circular dated July 2, 2003 the Board put forward proposals by which the Company offered Shareholders the opportunity to tender their Shares for purchase by the Company. An extraordinary general meeting of the Company was convened for July 25, 2003 to consider resolutions in connection with the proposed tender offer. As announced on July 25, this meeting was adjourned because the Board had received a requisition from Carrousel Capital Limited for alternative proposals to be put to Shareholders. Through UBS, the Board has made contact with Shareholders holding a majority of the Company's Shares to obtain their views on the future direction of the Company. In the light of the decrease in the Company's share price since its launch in 2001 and the discount to net asset value at which the Shares have been trading for some time, most of the Shareholders contacted expressed a desire for a cash exit from the Company at net asset value. The Board has considered a variety of possible alternatives available to it, including making available a successor vehicle into which some of the Company's assets could be transferred. It has, however, become clear to the Board that insufficient Shareholders wish to continue their investment in this way. Accordingly, the Board has concluded that proposals should be put to Shareholders providing for a voluntary winding-up of the Company. HENDERSON ABSOLUTE: Sets Extraordinary General Meeting Dec. 19 -------------------------------------------------------------- The Proposals An Extraordinary General Meeting of the Company will be held at 11.00 a.m. on Friday December 19, 2003 at which it will be proposed that the Company will be wound up in accordance with its Articles of Association. It is proposed that following the winding-up, the Company's resulting cash balance, after providing for all known liabilities, including the expenses of the Proposals, will be distributed to Shareholders pro rata to their holdings of Shares in the Company. Subject to the passing of the Special Resolution at the Extraordinary General Meeting, it is expected that an initial distribution of cash will be made to Shareholders by January 31, 2004. Any balance remaining in the hands of the Liquidators on the completion of the Liquidation will be paid in cash to the Shareholders on the register at the close of business on the Effective Date pro rata to their shareholdings at that time. Implementation of the Proposals If the Special Resolution is passed, the Liquidators will redeem all of the Company's investments. On the receipt of the proceeds of such redemptions, the Liquidators will set aside the Liquidation Fund comprising cash of an amount which they consider sufficient to provide for all known liabilities of the Company both actual and contingent, including the payment of: (a) any unpaid costs and expenses incurred, and/or to be borne, by the Company in formulating, preparing and implementing the Proposals, the Circular to Shareholders containing details of these Proposals and all associated documents and the Liquidators in implementing the Proposals not otherwise paid prior to the liquidation; (b) any tax and contingent liabilities of the Company; and (c) any other amounts considered by the Liquidators to be appropriate to provide for any costs, expenses, liabilities or contingencies. To the extent that any part of the Liquidation Fund or the proceeds of realization of any other asset or cash balances of the Company is not required to meet the Company's liabilities, the balance remaining in the hands of the Liquidators will be paid in due course as one or more Liquidation Distributions to Shareholders holding Shares on the Register at the close of business in Guernsey on the Effective Date on a pari passu basis pro rata to their respective holdings as at that time. After making provision for the Liquidation Fund, the balance of the proceeds of the redemption of the Company's investments will be distributed in cash by the Liquidators to Shareholders. Cheques in respect of the cash amount due to the Shareholders are expected to be dispatched by January 31, 2004, or as soon as practicable thereafter. Payments in excess of GBP100,000 may be paid through CHAPS at the request of Shareholders. Payments will be made at the expense and risk of the recipient. Cash entitlements will be rounded down to the nearest penny. Extraordinary General Meeting The Special Resolution will be proposed at the Extraordinary General Meeting to approve the winding-up of the Company, to appoint the Liquidators and to confer appropriate powers on them. In accordance with the Articles of Association, all Shareholders are entitled to vote on the Special Resolution. The Special Resolution will require the approval of 75% of those voting in person or by proxy at the Extraordinary General Meeting. Upon such Special Resolution being passed and entered by the Greffier in the Register of Companies in Guernsey the Company will be wound up. Notice of the Extraordinary General Meeting is set out at the end of the Circular. Costs The costs (excluding the Liquidators' retention and the remuneration to which the Manager is contractually entitled under its investment management agreement with the Company) to be borne by the Company in connection with the Proposals are not expected to exceed GBP225,000 (exclusive of VAT). Investment Management Agreement On August 7, 2003, 12 months' notice of termination was given by the Company to the Manager in respect of the investment management agreement dated March 12, 2001 between the Company and the Manager in accordance with the terms of that agreement. Dividends If the Proposals are implemented, no dividends will be declared or recommended on the Company's Shares. HENDERSON ABSOLUTE: Shares to Cease Trading December 16 ------------------------------------------------------- Stock Exchange Dealings and Settlement The Company's Share register will be closed and disabled in CREST at the close of business on Friday December 19, 2003. The last day for dealings in Shares on the London Stock Exchange for normal account settlement (to enable settlement prior to the Record Date) will be 5.00 p.m. on Tuesday December 16, 2003 (on a normal rolling three day settlement basis). On the morning of the Effective Date, dealings in the Shares will be suspended. The Company's admission to trading on the London Stock Exchange's market for listed securities will be cancelled and the Shares of the Company will be removed from the Official List of the U.K. Listing Authority on January 31, 2004. Certificates and Documents After the distribution of cash and any Liquidation Distribution(s), existing certificates in respect of Shares will cease to be of value for any purpose and any existing credit of Shares in any stock account in CREST will be cancelled. Documents available for inspection Copies of the following documents are available for inspection at the registered office of the Company and at the offices of Eversheds LLP, Senator House, 85 Queen Victoria Street, London EC4V 4JL during normal business hours on any weekday (Saturdays and public holidays excepted) up to and including the Effective Date: (l) the Memorandum and Articles of Association of the Company; and (2) the published audited accounts of the Company for the two financial years ended September 30, 2001 and September 30, 2002. Action to be taken Forms of Proxy for EGM Whether or not Shareholders propose to attend the EGM, the Form of Proxy should be completed and returned to the address set out on that form as soon as possible and in any event not later than 11.00 a.m. on Wednesday December 17, 2003. Completion and return of the Form of Proxy will not prevent Shareholders from attending and voting in person at the EGM, should they wish to do so. Recommendation The Board, which has been advised by UBS, believes that the Proposals are in the best interests of the Shareholders as a whole. In providing advice to the Board, UBS has taken account of the Directors' commercial assessment of the Proposals. Accordingly, the Board unanimously recommends Shareholders to vote in favor of the Special Resolution to be proposed at the EGM. The Directors intend to do the same in respect of their own beneficial and non-beneficial holdings of Shares (amounting in aggregate to 80,000 Shares representing approximately 0.08% of the issued share capital of the Company). EXPECTED TIMETABLE Latest time for receipt of Letters of Direction from PEP/ISA/Shareplan Shareholders 11.00 a.m. on Monday December 15, 2003 Last Day for dealings for normal settlement 5.00 p.m. on Tuesday (to enable settlement prior to the December 16, 2003 Effective Date) Record Date Latest time for receipt of Forms 11.00 a.m. on General Meeting of Proxy for Extraordinary Wednesday December 17, 2003 Suspension of Shares from trading on Friday 7.30 a.m. on the London Stock Exchange and suspension of listing December 17, 2003 on the Official List of the U.K. Listing Authority Extraordinary General Meeting on Friday December 19, 2003 11.00 a.m. Closing of Register of Shareholders on Friday December 19, 2003 5.00 p.m. Certified copy of the Special Resolution filed with Greffier Effective Date Cheques expected to be dispatched to Shareholders in respect of first Liquidation Distribution By January 31, 2004 CONTACT: HENDERSON GLOBAL INVESTORS Stephen Westwood Phone: 020 7818 5517 Stephen Phillips Phone: 020 7818 6417 UBS LIMITED Will Rogers Phone: 020 7568 2939 Nicholas Rucker Phone: 020 7568 8574 INTERTEK GROUP: Operating Profit Lags Turnover ---------------------------------------------- Pre Close Trading Statement Intertek, the global testing, inspection and certification company, reports on trading ahead of entering the close period for the financial year to December 31, 2003. The preliminary results will be announced on Monday March 8, 2004. Based on current results at constant exchange rates, turnover in the second half is showing similar growth to the first half of 2003. However operating profit is showing lower growth. The recent further weakness in the U.S. dollar is reducing the results at actual exchange rates such that management expects operating profit for the full year to be marginally below the figure for the previous year. The earnings per share (before exceptional items and amortization) are expected to remain within the range of analysts' forecasts. Labtest's turnover and profit continue to benefit strongly from the increased volumes of textile testing in Hong Kong, China and the rest of Asia, as well as increasing regulatory standards on toys and other products sourced from Asia. Caleb Brett oil cargo inspection continues to operate in a competitive environment but performance has improved from the first half of the year. The outsourcing side of the business is growing well, with new contracts being won. In ETL SEMKO, safety testing and certification of electronic and electrical products is growing well in Asia. Performance testing in America is producing good results but the telecoms equipment testing in Europe and America has still not yet recovered from the downturn that started in mid 2001. In order to improve the co-ordination and cross selling on the government standards programs in Saudi Arabia and Kuwait and to reduce overheads, the ETL SEMKO and FTS divisions are being merged under the leadership of Rob Dilworth. The results of the two divisions will continue to be reported separately. In FTS, the Nigerian Government has suspended all inspection work performed for it by Intertek with effect from late November. As previously reported, the Nigerian contract was expected to continue at least until the end of 2003 although the status beyond this date was uncertain. Nigeria accounts for approximately 2.5% of Intertek's turnover, so there will be a small reduction in the Group's operating profits in 2003 as a result of the suspension of the contract. The division is being restructured to compensate for the reduced workload. The recent contracts with Venezuela, Kuwait and Malawi are expected to make up for the lost turnover, but they are still incurring start up costs and are less profitable than Nigeria. The restructuring of the ETL SEMKO and FTS divisions is expected to result in exceptional charges of approximately GBP3.3 million on which there will be a two-year payback. Exceptional items In the second half, approximately GBP1.1 million of income arising from FTS government contracts relating to previous periods will be recognized as exceptional income. Exceptional income of approximately GBP1.4 million will also be recognized in respect of the liabilities recovered in relation to the Environmental Testing division, closed in 1998. As stated above, the restructuring of ETL SEMKO and FTS will result in an exceptional cost of GBP3.3 million. About Intertek Intertek is a leading international testing, inspection and certification organization, which assesses customers' products and commodities against a wide range of safety, regulatory, quality and performance standards and in some cases, certifies the management systems of customers. Intertek has over 270 laboratories with more than 11,000 people around the world and is increasingly undertaking outsourced testing work for its customers. CONTACT: INTERTEK GROUP Aston Swift, Treasurer and Investor Relations Phone: +44 (0) 20 7396 3400 E-mail: aston.swift@intertek.com Katie Macdonald-Smith, Tulchan Communications Phone: +44 (0) 20 7353 4200 E-mail: kmacdonald-smith@tulchangroup.com Home Page: http://www.intertek.com LE MERIDIEN: Hilton Could Run Waldorf Operations Within 24 Hours ---------------------------------------------------------------- Le Meridien's Waldorf hotel could go to U.K. hotel operator Hilton Group PLC's hands within the week, as sale negotiations advance to the final stages. A deal with owner Royal Bank of Scotland Group PLC is expected to close within the next 24 hours, Dow Jones Newswires reported Wednesday, citing a person familiar with the situation. The Waldorf, one of 11 Le Meridien hotels under sale and leaseback arrangements, went back to the bank at the end of July after Le Meridien failed to meet rental payments. The 126-hotel chain, with approximately GBP1 billion in debt and is said to be worth between GBP700 million and GBP800 million, is one of the world's best-known hotel operators, with 135 hotels in 56 countries. Its troubles started with the sharp downturn in tourism after the September 11 attacks, aggravated by the outbreak of SARS in Asia and the war in Iraq. It recently decided to dispose its international hotel business, which includes hotels such as the Forte Village in Sardinia and the Le Royal Meridien Bristol in Warsaw, after the failure of restructuring talks between Lehman Brothers and Hyatt Financial Corp. Ltd. The assets whose future are at stake excludes the 11 U.K. hotels controlled by RBS. Dow Jones said Lehman Brothers Holdings Inc., the largest mezzanine debtholder in the troubled hotel group, is still working on financial restructuring proposals to rescue the remaining 126 hotels of Le Meridien. MG ROVER: Union Appoints Expert to Scrutinize Books --------------------------------------------------- T&G and Amicus unions confirmed on Wednesday they hired former T&G finance director Peter Regnier to analyze the books of carmaker MG Rover, according to The Telegraph. The appointment came after union officials, representing some of MG Rover's 6,500 workers, met with some of the directors of the company's owner, Phoenix Venture Holdings, to discuss the company's finances. They said after the meeting they needed to call in an expert to help them understand some complicated information about the company's finances. Part of the discussion was the GBP12.9 million trust fund set up by the owners, Chairman John Towers, and three West Midlands businessmen. This they found as the car company continues to post heavy losses, a previous article of The Telegraph said. MG Rover's loss for last year was GBP95 million. Mr. Regnier was finance director of the T&G from 1993 to 2003. He also worked as a finance director for the carmaker in the mid-1980s. MG ROVER: Car Sales Dip Following Row over Directors' Trust Fund ---------------------------------------------------------------- MG Rover's car sales dropped true to predictions that arose after unions questioned a controversial trust fund set up by the firm's directors. The company's share of the market dropped 32% to 4,295 cars, just 2.6% of the market, last month, according to figures compiled by the car industry trade association. In November last year, with one day to go, it had 3.7%, which is a great concern as MG Rover only started to sell its small car last month, the report said. The fall follows a confrontation between union representatives and the directors of the company's owner, Phoenix Venture Holdings, about the company's finances, including the GBP12.95 million (US$22.4 million) trust fund. Phoenix Venture Holdings Chairman John Towers said the scheme gave Phoenix's five directors an annual income of between GBP60,000 and GBP80,000. During the meeting, however, the directors assured this does not disadvantaged MG Rover as the fund does not come from MG Rover. NETWORK RAIL: Costs of Government-backed Loan Could Double ---------------------------------------------------------- Taxpayers could pay as much as GBP70 million more a year to erase Network Rail's debts off the public accounts if its allowed to further increase its borrowing powers, the Telegraph found out. Network Rail currently has GBP9 billion in debts guaranteed by the Government-backed Strategic Rail Authority. In its draft report into Network Rail, the National Audit Office said the current cost to the taxpayer of such guarantees was "GBP20 million to GBP35 million per year more than if Network Rail had borrowed from the public sector." The auditor warned: "This cost is likely to rise." Network Rail is to raise its debts from GBP9 billion at the half-year to GBP14 billion by next March. The Strategic Rail Authority is further proposing to raise the company's borrowing limit by between GBP1.5 billion to GBP2 billion annually for three years. City analysts calculated that raising Network Rail's borrowings to the level the SRA wants could double such costs, according to the report. Network Rail would also face extra interest charges of up to GBP100 million a year for servicing more debt over the period. Standard & Poor's said the steep increase in debt could only be possible with government guarantee as investors would likely see to it their investment are protected. Lifting the limit to Network Rail's debt could delay plans of rail regulator Tom Winsor to increase track access charges for five years from April 2004, which threatens the Strategic Rail Authority with GBP8 billion funding gap. RAILTRACK PLC: Shareholders Demand Fair Compensation from Govt -------------------------------------------------------------- Private shareholders in Railtrack is taking the government to court in an attempt to seek "fair value" compensation for their investments in the failed company, according to Ananova. Railtrack Private Shareholders Action Group, with 45,000-strong members, has issued a claim in the High Court after an attempt for an out-of-court settlement failed. They said that the Government refused to meet its representatives, forcing them to start legal proceedings. The case is effectively against the administration of former Transport Secretary Stephen Byers, who took Railtrack into administration in October 2001, but it will be defended by the Department for Transport. The Government promised shareholders compensation of GBP500 million (or about GBP2.50 a share) in March 2002. Shareholders have so far received GBP2.00 per share in January this year and 43p per share in August. They are due to receive more shortly, according to the report. RANK GROUP: Offers New Debt to Refinance Guaranteed Bonds --------------------------------------------------------- The Rank Group Plc announces the pricing of the offering of GBP150 million Convertible Bonds due 2009. Rank is issuing the Bonds primarily to refinance the Group's GBP125,000,000 7.25% guaranteed bonds due 2008, which are due to be redeemed on December 8, 2003, hence benefiting from the attractive financing opportunities available in the current convertible bond market. The Bonds will be issued by Rank and will, subject to the terms and conditions of the Bonds, be convertible into a maximum of 39,851,222 new Rank ordinary shares at the initial conversion price (representing approximately 6.7% of Rank's current issued ordinary share capital). The Bonds will be issued at 100% of their principal amount. The coupon on the Bonds will be 3.875% per annum payable semi-annually in arrears and the initial conversion price will be 376.4p, a premium of 31% to the reference price of Rank's Shares. Settlement is expected on or about January 20, 2004. In addition, Rank has granted the Joint Lead Managers an option to subscribe for additional Bonds with an aggregate principal amount of up to GBP17.7 million at any time before settlement. Applications will be made for the Bonds to be admitted to the Official List of the U.K. Listing Authority and to trading on the London Stock Exchange's market for listed securities. Deutsche Bank and JPMorgan are Joint Lead Managers. Deutsche Bank will act as stabilization manager. CONTACT: THE RANK GROUP PLC Phone: 020 7706 1111 Ian Dyson, Finance Director Peter Reynolds, Director of Investor Relations DEUTSCHE BANK Phone: 020 7545 8000 Martin Fisch Phil Cowdy JPMORGAN Phone: 020 7325 1000 Viswas Raghavan John Lydon ROOM SERVICE: Short-selling Stirs Further Troubles -------------------------------------------------- Room Service almost lost one of its independent directors as a result of the public furor that arose from the short-selling of Room Service shares by market makers. Investors claim market makers such as Evolution Beeson Gregory sold about two thirds more shares than the company had issued on the market, leaving many investors at a loss for shares they thought they had. "They are not saying 'it is all your fault', but they want to take it out on someone. I have been inundated constantly," Mr. Gold said referring to the numerous phone calls he got from angry shareholders. He considered resigning to end the harassment, he said, but decided to stay on. "[I want] to give my best efforts to do the best thing for the shareholders," he said. But before the smoke of the fiasco clears, another issue is threatening to get the ire of the shareholders again. Shareholders who had not yet received share certificates after the debacle are being excluded from Room Service's placing and open offer, which will see 10 shares offered for every existing share held. Nigel Smith, a spokesman for the Room Service Shareholders' Action Group, said at least 80 shareholders were affected. He is suggesting the company defer its offer until the market makers settles its problem. A spokesman from the bourse said the exchange will look into the matter in the absence of an "explicit rule." ROOM SERVICE: Confirms Details Relating to Chiddingfold's Offer --------------------------------------------------------------- On December 2, 2003 Chiddingfold Investments Limited announced the terms of a mandatory offer for Azure Holdings Plc (formerly Room Service Group Plc). Under Rule 2.10 of the City Code on Takeovers and Mergers the Company confirms: (a) the Company has 1,242,250 Ordinary Shares of 1p each in issue and admitted to the Alternative Investment Market under the ISIN Code GB 0033692368. (b) the Company has granted options over 177,728 ordinary shares of 1p each that are outstanding. Following admission of the shares to be issued under the Placing and Debt conversion (details of which were set out in the announcement made by the Company on December 2, 2003) the Company will have 31,242,250 Ordinary Shares of 1p each in issue. Dealings in the new shares are expected to commence on December 5, 2003. ROYAL & SUNALLIANCE: Sells Stake in La Construccion to La Camara ---------------------------------------------------------------- Royal & Sun Alliance Insurance Group plc announces that it has agreed to sell its 51% stake in its Chilean life subsidiary, Compania de Seguros de Vida La Construccion, SA to La Camara Chilena de la Construccion, the current 49% shareholder. The consideration for Royal & SunAlliance's shareholding will be around GBP44 million (US$74 million), to be paid in cash. As at December 31, 2002 the net asset value of Royal & SunAlliance's share in La Construccion, on a U.K. GAAP basis, was approximately GBP54 million (US$90 million) and the consolidated profit contribution for the first nine months of 2003 was GBP4.5 million (US$7.6 million). Simon Lee, Royal & SunAlliance's CEO International Businesses, said: "La Construccion has been a successful business venture for the Group over the years, but given our increasing focus on general insurance we believe that it is now appropriate to withdraw from the business and for the company to revert to local ownership. I wish every success to the management and employees of La Construccion, and to our former joint venture partner in its role as sole owner of the business." The business is to be sold as a going concern. Proceeds of the sale will be used by Royal & SunAlliance to support its ongoing general insurance businesses. Royal & SunAlliance has also agreed to purchase the 30% shareholding of La Camara in Royal & Sun Alliance Vida of Peru, their other joint venture, for around GBP2 million (US$3 million), subject to regulatory approval. (a) Royal & SunAlliance's general insurance business in Chile will be unaffected by the sale. (b) Royal & SunAlliance acquired a majority shareholding in La Construccion in 1999. (c) La Construccion is the third largest life insurance company in Chile. (d) For the year ending 31 December 2002 La Construccion's written premiums were US$157 million (GBP95 million). (e) At December 31, 2002 net asset value on a local GAAP basis was GBP36 million (US$60 million). ********* 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. 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