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/raid1/www/Hosts/bankrupt/TCREUR_Public/040119.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 Monday, January 19, 2004, Vol. 5, No. 12 Headlines F R A N C E SUEZ SA: Analysts Expect Net Loss from Operations for 2003 G E R M A N Y PHILIPP HOLZMANN: Former Executives Accused of Phony Stock Deals G R E E C E ROYAL OLYMPIC: Amicably Resolves Differences With German Banks H U N G A R Y MALEV HUNGARIAN: To Start Joint Flight With Chinese Airline I T A L Y PARMALAT SPA: Parma Shareholders Agree To Cover Losses R U S S I A SISTEMA: Fitch Assigns Latest Ratings, Expectations S W E D E N CONCORDIA BUS: Nordic AB Proposed EUR125 MMM Notes Rated 'B-' SCANDINAVIAN AIRLINES: Direct Sales Agreement Can Save SEK60 MM S W I T Z E R L A N D SWISS INTERNATIONAL: Passes 10 Million-Passenger Mark in 2003 U N I T E D K I N G D O M ABBEY NATIONAL: 730 Edinburgh Staff at Risk of Redundancy AUSTIN REED: Interested Bidders Take Back Takeover Plans AUSTIN REED: Reports Trading Statement And Management Changes BOOTS GROUP: Proposes Nottingham Head Office Reorganization BOOTS GROUP: Union Angry Over Lack of Consultation on Redundancy BRITISH AIRWAYS: To Start Codesharing With American Airlines CAMEL VALLEY: Under Receivership CANARY WHARF: Founder Temporarily Off Board CANARY WHARF: Morgan Stanley to Break Up Firm Under Bid Plan CANARY WHARF: Posts Offer Documentation For Shareholders CLARKS: Shut Down of Barnstaple Abbeyfield Operations Planned CORUS GROUP: To Invest EUR42 Million on German Aluminium Mill EGG PLC: Fitch Places F1 Ratings on Rating Watch Evolving KENNETH A FOGG: Clothing Manufacturing Equipment for Sale LEEDS UNITED: Proposes to Cut Players' Fees, Sell Big Names PNC TELECOM: Court Orders Discharge of Administration Order PPL THERAPEUTICS: Divests Laboratory Equipment For GBP192,000 WATFORD LEISURE: To Sell Majority Stake in Club to the Roussos - - - - - - - - =========== F R A N C E =========== SUEZ SA: Analysts Expect Net Loss from Operations for 2003 ---------------------------------------------------------- French electricity, gas and water utilities company Suez was rated "in-line" to "underperform" by analysts at Delta Lloyd on expectations the company will post a loss in 2003. New Ratings, citing Delta Lloyd Securities' research note, said analysts believe Suez's operating performance in 2003 would suffer greatly from high capital loss and restructuring expenses. They expect Suez to be the only European utilities company to post a net operating loss for 2003. Delta Lloyd recognizes Suez recent price rally, which analysts attribute to the firm's successful reaching of its debt reduction target. But it does not anticipate any positive news-flows regarding the company's restructuring plans in the near term. Suez's loss of a major Puerto Rican outsourcing contract is also an area of concern for analysts. ============= G E R M A N Y ============= PHILIPP HOLZMANN: Former Executives Accused of Phony Stock Deals ---------------------------------------------------------------- Ten managers of bankrupt construction company, Philipp Holzmann are facing legal suits on alleged use of fabricated stock purchases to discourage buyout offers, according to FAZ.net. Public prosecutors last week brought charges against the executives, as well as the state bank of North Rhine-Westphalia, and another unnamed bank, thought to be WestLB, in relation to the allegations. The suit is believed to include former chairman of Philip Holzmann, Lothar Mayer, and former managing board chairman, Friedel Neuber, who is now WestLB's supervisory board chairman, observers say. The use of sham stock purchases was allegedly employed against competitor Hochtief who was interested in purchasing Philipp Holzmann in 2001. According to the charges, unspecified members of Holzmann's managing board purchased 5% of Holzmann's stock from BHF Bank and Bankhaus Warburg and parked it at West LB. The action took EUR50 million out of the stock package's value. Holzmann allegedly explained the loss using fictitious transactions. According to the report, Neuber's lawyer, Christian Richter, dismissed the charges as "absolutely groundless," explaining that Holzmann had already owned the stocks held by BHF and Warburg. Due to structural changes in WestLB that renders the German bank not directly affected by the charges, judges at the Frankfurt court are still deliberating whether to hear the case. Philipp Holzmann filed for insolvency in 2002. =========== G R E E C E =========== ROYAL OLYMPIC: Amicably Resolves Differences With German Banks -------------------------------------------------------------- Royal Olympic Cruise Lines Inc. (Nasdaq, ROCLF) announced Thursday that it and two of its subsidiary companies, Olympic World Cruises, Inc. and Royal World Cruises, Inc., owners of the cruise ships OLYMPIA VOYAGER and OLYMPIA EXPLORER respectively, which latter two companies are subject to a Chapter 11 reorganization proceeding pending in Honolulu, Hawaii, have amicably resolved their differences with German lending institutions by an agreement for the resolution of the pending proceedings by consent. While a further announcement on the terms and effect of the agreement relative to these two ships will be made shortly, Royal Olympic stated that this agreement represents a major step forward for resolution of the present impasse facing the company, which also involves the arrest in Durban, South Africa, of the vessel OLYMPIA COUNTESS (as to which owners are currently in discussion with creditors). CONTACT: MTI NETWORK USA Mike Hanson Phone: +1 203 406 0106 Mobile: +1 845 629 0259 ============= H U N G A R Y ============= MALEV HUNGARIAN: To Start Joint Flight With Chinese Airline ----------------------------------------------------------- Hungary's struggling aircraft servicing company, Malev Hungarian, could start its joint flight with Chinese Hainan Airlines Company Ltd. in August 2004, Budapest Business Journal reported Thursday, citing a company spokesperson. Adrien Krebz said that under a memorandum signed by Malev CEO and President Laszlo Sandor, HNA's Boeing-767-300 aircraft will fly the Budapest-Beijing route at least three times a week. The Malev-HNA cooperation agreement is set to be signed in February or March and an HNA delegation is expected in Budapest on Thursday to coordinate timetables and sales channels, she added. A former Malev scheduled service to China between September 1, 1998 and March 24, 2002 had to be stopped for financial reasons. Malev is currently aiming to reduce its losses -- HUF8.7 billion in the first nine months of 2003 -- in order to receive a HUF3 billion capital injection from the State Privatization and Holding Company in the first quarter of 2004. It recently announced a restructuring at its Aeroplex Kft unit, which was awarded a five-year contract with an unnamed partner for maintenance and hangar service and is expected to sign another similar contract at the end of January. ========= I T A L Y ========= PARMALAT SPA: Parma Shareholders Agree To Cover Losses ------------------------------------------------------ Parmalat Finanziaria S.p.A., under Extraordinary Administration, communicates that today was held the Shareholder Meeting of Parma Associazione Calcio S.p.a., a company controlled indirectly through Parmalat Spa, also under Extraordinary Administration. The Meeting agreed steps to cover losses resulting from the economic and financial situation of the Company as at 30 September 2003 and to restore the company's capital position to an amount of Euro 20 million through the conversion of credits by Parmalat S.p.A., under Extraordinary Administration. Minority shareholders reserved their right to participate in the covering of these losses and in the capital increase, as provided for under the relevant legislation. Having noted the resignations of Stefano Tanzi, Paolo Tanzi and Francesca Tanzi, other resignations already submitted, and of the availability of Alessandro Chiesi also to resign his mandate, the Shareholder Meeting appointed a new Board of Directors consisting of Enrico Bondi (President), Umberto Tracanella, Guido Angiolini and Luca Baraldi. Furthermore, a new Statutory Board of Auditors was appointed, replacing the outgoing Board of Auditors, consisting of Angelo Stimamiglio, President, Massimo Nuti and Marco Ziliotti. Finally, the Shareholder Meeting removed Grant Thornton as auditors to the Company and appointed in its place PriceWaterhouseCoopers. Following the Shareholder Meeting, the Board of Directors met to appoint Luca Baraldi as Chief Executive Officer of the Company. The new Board of Directors of Parma Calcio expressed its appreciation for the spirit and approach of the team and its coach, who have shown through their skill and performance how to deal with the difficult times facing the Parmalat Group. In this way they are making their contribution to ensuring continuity for one of the football world's most distinguished clubs. =========== R U S S I A =========== SISTEMA: Fitch Assigns Latest Ratings, Expectations --------------------------------------------------------------------------- Fitch Ratings-London-15 January 2004: Fitch Ratings, the international rating agency, has today has assigned Sistema Capital SA's expected guaranteed senior notes issue a rating of 'B-' (B minus). At the same time, the agency has affirmed Sistema Joint Stock Financial Corporation's ("Sistema") Senior Unsecured foreign currency and local currency ratings at 'B'. The Outlook on these ratings is Stable. Although the bonds are guaranteed by Sistema, the rating reflects the seniority of Sistema's secured creditors' claims compared to the holders of the expected notes, as well as some changes in liens permitted by the provisions of the documentation. The Sistema ratings take into account the acquisition of majority control of the MTS mobile business during 2003. While consolidation of MTS has resulted in a substantial uplift in the group's reported consolidated financial performance, Sistema's former minority holding's substantial value was already factored into the ratings. Sistema's businesses performed well in 2002, achieving a good improvement in consolidated revenue and operating cash flow generation, a trend which continued into 2003. It has maintained a significant level of investment activity and this is anticipated to continue, with debt and leverage levels expected to have risen in 2003, even after adjusting for the MTS consolidation. Although Sistema is expected to sell non-core assets, Fitch believes the group remains open to major new strategic initiatives. The rating continues to reflect structural subordination at the holding company level. As a non-trading holding company, Sistema is largely reliant on the receipt of dividends and management fees, as well as the proceeds of asset sales, to cover its administrative, debt service and tax expenses. Fitch expects dividends from MTS to be Sistema's major source of cash flow. Although MTS is profitable and able to pay dividends, the mobile business will continue to invest substantially and will possibly not be able to reduce its own borrowings substantially over the coming years. During 2003 Sistema and MTS have demonstrated their ability to access the debt markets to extend their maturity profiles and so improve liquidity. In order to support further strategic initiatives, Fitch believes that Sistema and its subsidiaries are likely to need additional equity capital. JSFC Sistema has interests in over 200 enterprises in different sectors of the economy, including telecommunications (MTS, MGTS, MTU-Inform, Telmos, and a number of other leading telecommunications companies), technology (Concern Scientific Centre), insurance (ROSNO), real estate and construction (SISTEMA-HALS), oil and oil products (Nedra), retail (Detsky Mir), finance and securities (MBRD), mass media (newspapers Rossia, Smena, Metro, Literaturnaya Gazeta), travel services (VAO Intourist), pharmaceuticals (Medical Technological Holding, or MTH). =========== S W E D E N =========== CONCORDIA BUS: Nordic AB Proposed EUR125 MMM Notes Rated 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services said Thursday it assigned its 'B-' senior secured debt rating to Sweden-based Concordia Bus Nordic AB's proposed ?125 million senior secured notes issue maturing in 2009. The proposed notes are rated one notch below Concordia Bus Nordic's indirect parent, Swedish bus service provider Concordia Bus AB (B/Negative/--), to reflect structural subordination to operating lease providers. At Nov. 30, 2003, the group's future operating lease payments had a net present value of Swedish krona Skr964 million (?105 million). Structural subordination is mitigated by the provision of upstream guarantees on a secured basis from substantially all the group's operating subsidiaries and a guarantee from Concordia's direct parent, Concordia Bus Nordic Holdings AB. The proposed notes rank senior to Concordia Bus' existing ?160 million bond due in 2010, which is rated one notch below the proposed new issue at 'CCC+', and reflects the weaker structural position of the unsecured debt at the holding company level. "Standard & Poor's expect funds from the proposed notes to be used to improve the group's liquidity by refinancing its entire senior bank debt facilities," said Standard & Poor's credit analyst Leigh Bailey. If the issue is successful, it will relieve financing pressure on the group and improve financial flexibility, as future debt repayments, previously due under the bank facilities, will be deferred until the maturity of the notes in July 2009, and financial maintenance covenants will no longer be applied. The improvement in liquidity is assumed within the current ratings and the refinancing completion is expected by the end of March 2004. SCANDINAVIAN AIRLINES: Direct Sales Agreement Can Save SEK60 MM --------------------------------------------------------------- Scandinavian Airlines in Sweden has signed a new agreement with the appropriate trade unions regarding SAS direct sales in Sweden (Sales Center operations). The agreement means that SAS direct sales can continue to be operated in-house in Ornskoldsvik, Ostersund and Lulea. Direct sales in Sundbyberg will be discontinued effective June 30, 2004. About 100 employees will be affected and discussions about terms for these persons are continuing with the HTF (Salaried Employees' Union) section in Stockholm. As a result of the agreement, the majority of sales can be retained in-house and it ensures Scandinavian Airlines competitive and market-level terms and efficiency. The savings are being made as part of the SAS Group's Turnaround 2005 improvement program and the new agreement means that Scandinavian Airlines will reduce its annual costs by about SEK60 million. Implementation will produce a full effect in 2005. Despite difficult conditions, the work has been conducted in close cooperation and with strong mutual understanding with the trade union representatives. "Thanks to our union organizations' understanding of the situation, we now have an agreement that makes us competitive in the direct-sales market," says Lennart Johansson, Sales Director in Sweden. "The agreement generates nearly a halving of handling costs, which is a prerequisite for providing a competitively priced customer offering in the Swedish market." "We are satisfied that we have been able to secure the retention of direct sales under SAS management," says Tony Skopac, HTF Section Chairman in Ornskoldsvik. "This is when the work begins and we will cooperate to conduct the activities required by the cost savings." Competition is intensifying and the customer trend remains cautious for business travel. Despite the major savings measures already implemented, further activities are required to help SAS become competitive and able to continue offering competitively priced travel. The basis for this agreement is a joint union and company effort to compare competing direct-sales operations (benchmarking) in terms of conditions and service levels. Scandinavian Airlines in Sweden has approximately 3,500 employees, of which 380 work in direct sales. CONTACT: Lennart Johansson Sales Director Scandinavian Airlines Sweden Phone: +46 (0)70-997 48 70 Tony Skopac HTF Section (Salaried Employees' Union) Chairman Ornskoldsvik Phone: +46 (0)705-725 024 ===================== S W I T Z E R L A N D ===================== SWISS INTERNATIONAL: Passes 10 Million-Passenger Mark in 2003 ------------------------------------------------------------- Swiss International Air Lines transported a total of 10.66 million passengers on its scheduled services in the 2003 business year, posting a systemwide seat load factor of 72.4 per cent. Seat load factor for intercontinental services stood at 78.0 per cent, while seat load factor for the European network amounted to 59.6 per cent. Traffic trends were especially encouraging in the fourth quarter: seat load factor stood at 75 per cent, a 4.2- percentage-point gain on its prior-year equivalent. The network modifications introduced with the 2003/04 winter schedules and the new "Swiss in Europe" business concept both had a positive impact on traffic levels in the fourth quarter of 2003. The period saw some 2.4 million passengers carried on SWISS scheduled flights, raising seat load factor to 75 per cent, a 4.2-percentage-point improvement on the prior-year result. Some 1.8 million of these passengers were carried on the European network, while a little over 625 000 customers used SWISS's intercontinental services. Fourth-quarter seat load factor for Europe stood at 61.7 per cent, an 8.4-point increase on its prior-year equivalent, while intercontinental seat load factor for the quarter amounted to 80.4 per cent, a 0.8-point improvement on the same period last year. The new route network's beneficial effect on traffic levels was reflected in encouraging November and strong December results. The latter brought increases in traffic volumes in all markets except Africa, with a correspondingly substantial rise in seat load factors: December seat load factor for Europe was a 7.4- point improvement on the same month in 2002, while the intercontinental seat load factor for December was 3.8 points up on prior-year levels. Africa was the weakest region in traffic terms for the fourth quarter as a whole. The South Atlantic posted year-on-year increases - substantial in part - for all three months. Far East traffic volumes remained broadly stable in October and November, while volumes over the North Atlantic suffered a slight decline; but December brought encouraging volume increases for both regions. Review of the year The war in Iraq, the outbreak of SARS and the overall economic recession all had their impact on the demand for international air services in 2003. In addition to the generally sluggish demand, the peaks of the Iraq war and the SARS epidemic further depressed traffic volumes, especially in the Middle and Far Eastern markets. Traffic volumes in Europe were additionally eroded by the growing competition from low-cost carriers. SWISS responded to these trends and the challenges they posed by consistently adapting its fleet and its network to changing market needs, and with the introduction of its new Swiss in Europe business concept. Europe SWISS carried a total of 7 952 479 passengers on its European services in 2003, posting a seat load factor of 59.6 per cent. European traffic volumes remained reasonably stable, despite the difficult business environment - a development due in no small part to the timely consolidation of the SWISS route network before the outbreak of hostilities in Iraq. The action taken had its first effects as early as April, following the adoption of the new summer schedules. The route network was further modified with the start of the 2003/04 winter schedules. As a result, by December, SWISS's total European production was 31.1 per cent lower than its prior-year equivalent in available-seat-kilometre (ASK) terms. The new Swiss in Europe business concept made its own additional contribution to improving European seat load factors from September onwards. Intercontinental A total of 2 708 236 passengers travelled on SWISS's intercontinental services in 2003, producing an average seat load factor of 78.0 per cent. SWISS's intercontinental traffic proved more susceptible to the international crises which occurred in the course of the year: results for every month from April to November were down on their prior-year equivalents (since SWISS was only established in April 2002, no comparable figures are available for the January-to-March period). A brighter note was offered by the clear shift in trends from the start of the winter schedules. The 78-per-cent seat load factor posted for November was only 0.2 percentage points below its 2002 counterpart, while the 81.3 per cent recorded for December exceeded its prior-year equivalent by 3.8 points. As a result of the network modifications effected during the year, intercontinental ASK production for December was 16.1 per cent less than it had been for the same month in 2002. Key figures for SWISS scheduled services in 2003 Passengers carried 10 660 715 Flights performed 189 086 Available seat-kilometres (million) 33 478 Revenue passenger-kilometres (million) 24 223 Systemwide seat load factor 72.4% Full details of SWISS's traffic results for 2003 are available on the company's http://www.swiss.comwebsit. SWISS will report on its financial results for the 2003 business year on March 23. CONTACT: SWISS CORPORATE COMMUNICATIONS P.O. Box, CH-4002 Basel Phone: +41 848 773 773 Fax: +41 61 582 3554 E-mail: communications@swiss.com Homepage: http://www.swiss.com =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: 730 Edinburgh Staff at Risk of Redundancy --------------------------------------------------------- Abbey National's plans to relocate 900 jobs from Edinburgh to Glasgow have been exposed after details have been uncovered showing only 25 members of staff who could move to Glasgow. The admission comes within the leaked Project Sapphire document, which is dated 18th December 2003 and says on page 1. Subsection 2: 'A significant majority of the 730 people effected live in and around Edinburgh. So the option of traveling to Glasgow is unlikely to be regarded as an equivalent job and they will therefore be at risk of redundancy.' 'It is not anticipated that many people will be prepared to move with the work to Glasgow. Based on Peoplesoft records there are 25 people who live West of Edinburgh e.g. Falkirk where a transfer to Glasgow may regarded as equivalent.' Hugh Scullion, Amicus Regional Officer, said: "This gives a lie to Abbey's decision and casts doubt over their motivation to move to Glasgow. It explodes their argument that their decision is a relocation and not wholesale redundancy." "Questions must now be asked and answers given. We want assurances that these jobs will not disappear out of Scotland to India". "This is a real embarrassment for the company. Their own document shows that since 18th of December they have known that Project Sapphire was not a relocation but in fact a sophisticated way of laying off hundreds of people". AUSTIN REED: Interested Bidders Take Back Takeover Plans -------------------------------------------------------- Prospective buyers for clothing retailer Austin Reed said they have dropped plans to pursue the acquisition, according to The Times. The company has pegged its net asset value at 183p, and would not accept a lower offer. Austin Reed's share price at Friday's reporting is 131�p, down �p. The news came as the company reported a sharp decline in underlying sales, which was followed immediately by the ouster of chief executive Roger Jennings. Sales at the refurbished flagship on London's Regent Street are thought to have risen 13%, but wholesale revenues and sales at Country Casuals, the group's women's clothing retail chain, were poor. AUSTIN REED: Reports Trading Statement And Management Changes ------------------------------------------------------------- Austin Reed Group PLC reports that retail sales in the 22 weeks to 10 January 2004 were down 5.2% in total and down 11.3% on a like for like basis against the previous year. This result shows a marginal improvement on the sales performance for the 15 weeks of this period reported in the Trading Statement issued on 27 November 2003. As anticipated in that statement, gross margins for our UK retail businesses for the second half will be slightly lower than last year. Together with the cost savings made following the reorganisation, implemented from March 2003, the Board now expects that pre tax profits before exceptionals for the year to 31 January 2004 will be in line with the Board's expectations at 27 November 2003. Roger Jennings has decided to step down as Chief Executive of the Group and will be leaving the Company to pursue other interests. He has resigned as a Director of the Company with immediate effect. A search has commenced to find a suitable successor. David Lowbridge, currently a Group Executive Director, has been appointed Acting Chief Executive for the interim period. Mr Lowbridge joined the Group as Managing Director of Country Casuals when it was acquired in 1998 and has served as a Director of the Group since April 2001. CONTACT: Richard Constant, Gavin Anderson & Company Phone: 020 7554 1400 BOOTS GROUP: Proposes Nottingham Head Office Reorganization ----------------------------------------------------------- As part of its agenda to modernize its business, Boots announced proposals to accelerate the re-organization of its Nottingham head office. This would cut layers of management and deliver a simpler and more responsive business. Headcount would reduce by 900. The changes would affect all support and central functions based in Nottingham and some regional store support roles. Boots has also announced the strengthening of the store organization in all three key areas of pharmacy, sales and operations. This will create an additional 290 roles over the next year. Explaining the decision on behalf of the executive team, Richard Baker, Boots Chief Executive Officer said: "The management team has a remit to make the business modern and more efficient and competitive. We announced the 'Getting in Shape' cost program in 2002 with the intention of achieving �100 million cost savings from back office and supply chain activities. Today's announcement about the Nottingham head office is the next step of this program. Boots operates in an extremely competitive environment where pace of decision-making and speed of implementation is integral to success. The proposed changes would reduce complexity and costs of head office functions, which improves our ability to compete." Redundancies will be managed in accordance with established company practice and as many as possible will be achieved through voluntary redundancy. Full outplacement support will be provided. The headcount reduction would be achieved over six months with full year savings of �39m of which �5m have been reinvested in the new store roles. The expected cost is �47m of which �30m falls in the current financial year. This is ahead of the original 'Getting in Shape' timetable. CONTACT: Media Donal McCabe Matthew Dransfield Phone: +44 (0) 115 968 7029 +44 (0) 115 968 7284 Investors Peter Baguley Phone: +44 (0) 115 968 7171 Mobile: +44 (0) 7770 440 690 BOOTS GROUP: Union Angry Over Lack of Consultation on Redundancy ---------------------------------------------------------------- Amicus the UK's largest private sector union reacted angrily to an announcement by Boots the high street giant regarding 900 redundancies at its Nottingham Head Office. The union is furious that despite representing Boots staff it has not been properly consulted by the company prior to Thursday's announcement. In particular Amicus is concerned about the trailing in many national and local media outlets over the previous week of information that was contained in Thursday's announcement by Boots. "This is no way to conduct business," said Nev Jackson, Amicus East Midlands Regional Secretary. 900 job cuts with the bulk hitting Nottingham will have a massive effect on the local economy and community with the multiplier effect on local suppliers and business causing further job losses to the area. This is another example of the weak information and consultation laws in this country, Amicus has been campaigning with the Government to improve these rights and give employees more protection when companies want to restructure in the way Boots have done. "The lack of proper consultation laws and weak redundancy rights for British workers is making it far too easy to sack UK workers." "Boots have treated the 900 workers who are threatened with losing their job very poorly. It's unacceptable to trail job cuts in the media prior to consulting with those effected." "To read that your job is under threat in the paper is soul destroying and totally unacceptable. The Government must act to strengthen consultation laws to stop this type of situation happening again." added Mr Jackson. BRITISH AIRWAYS: To Start Codesharing With American Airlines ------------------------------------------------------------ British Airways' first regional transatlantic codeshare flights with American Airlines to and from the UK regions, offering customers more choice and simpler booking, open for sale this weekend. Daily flights from Manchester to New York and Chicago will now carry both airlines' flight codes. ` Also, new codeshare destinations added to the BA network will be Portland, Oregon; Fort Lauderdale, Florida; Greenville, South Carolina and Madison, Wisconsin. In addition, the codeshare will provide additional frequencies to 6 other destinations including Denver, Atlanta and St Louis. American Airlines will be extending its reach by placing its flight code on selected BA services from London Gatwick including Pristina. American will also be placing its code on BA longhaul services to Nairobi. The US Department of Transportation gave approval in May last year to the codesharing application made by the two airlines to place each other's code on services operated between the UK regions and USA. At the same time approval was given to codeshare on destinations beyond British Airways' 18 US gateway cities, (such as Chicago and Miami), and American Airlines' UK gateways. The rollout of codeshare destinations beyond these points began in August 2003 and included Raleigh Durham, Nashville, Cincinnati, Indianapolis, Minneapolis St Paul, Pittsburgh, New Orleans, Panama City and San Antonio. The codeshare relationship brings a substantial number of `new' US, Central and South American destinations under the BA flight code and marks a significant increase to the number of routes bookable directly through BA.com, BA reservations and travel agents. Customers of both airlines will enjoy the benefits of simpler transfer and check-in processes. Transatlantic sectors between London and the US are not included in the current codeshare and frequent flyer agreements. ends (a) British Airways and American Airlines are founder members of the oneworld alliance, which also includes Aer Lingus, Cathay Pacific, Finnair, Iberia, Lan Chile and Qantas. (b) British Airways' alliance partnership with American Airlines, through oneworld, covers frequent flyer and lounge arrangements for oneworld members and the ability to sell on each other's networks for connecting business. (c) See below for background table on American Airlines and British Airways. American Airlines British Airways Destinations 243 222 Countries/Territories 49 94 Employees 104,604 44,612 Fleet (operated) 944 301 Frequent Flyer programme Aadvantage Executive Club Number of lounges 50 222 Chief Executive Gerard Arpey Rod Eddington Ownership Wholly owned Publicly quoted company subsidiary of AMR Corporation Website address http://www.aa.com http://www.ba.com CAMEL VALLEY: Under Receivership -------------------------------- Barclays Bank, the main creditor of Camel Valley Poultry Ltd., called in receivers Grant Thorton for Cornwall's biggest poultry rearing and processing company last week, according to North Devon Journal. The fall of the Camelford-based company came two years after it was announced that Camel Valley Poultry was embarking on a GBP3 million expansion, creating 51 new jobs over six years. Founder Clive Davies obtained GBP760,000 worth of funding from Objective One, and a matching sum from the Government to satisfy an increasing U.K. demand for premium quality chicken. Before the filing, Mr. Davies had drawn down total funding of GBP556,000. The construction of the new facilities was thought to be necessary for the company's long-term viability. Camel Valley used to employ 25 full-and part-time staff to process 150,000 birds a year. CANARY WHARF: Founder Temporarily Off Board ------------------------------------------- Paul Reichmann temporarily stepped down as director of Canary Wharf in a move that a spokesman from the company said was made by "mutual agreement," according to Times Online. He will technically remain as director and continue to receive his GBP507,000-a-year salary, but he is not to attend board meetings or discussions regarding the firm's takeover process. Mr. Reichmann, founder and former chairman of Canary Wharf, has plans of buying troubled Docklands developer. He and Canadian property firm Brascan, a major shareholder in Canary Wharf, were given by the Takeover Panel until February 13 to make a bid or withdraw. CANARY WHARF: Morgan Stanley to Break Up Firm Under Bid Plan ------------------------------------------------------------ U.S. investment bank Morgan Stanley is planning a major disposal of Canary Wharf's estate, and give directors certain incentives linked to performance once it acquires the property group. The Telegraph, citing documents to shareholders, said Morgan Stanley's GBP1.6 billion cash-and-share-bid includes the disposal of certain assets, and the refinancing of the group's property leases "to create shareholder value". The plan is to leave only "a core sub-group of buildings...to maintain [the enlarged group's] integrity". Under the plan, directors of Canary Wharf could get a 3% stake in the property company potentially worth up to GBP50 million, once the company pays back GBP900 million of its debt, repays shareholders and meet performance targets, including reaching property valuations of 2000 levels. Directors will also get a non-conventional extension of their notice periods to two years. A meeting for shareholders to vote on the offer is scheduled for February 23. If 75% or more agree, the bid should complete in March. A rival bid from Brascan or Canary Wharf chairman Paul Reichmann, is due February 13. CANARY WHARF: Posts Offer Documentation For Shareholders -------------------------------------------------------- The Independent Committee of Canary Wharf Group plc announces that it expects to post the Scheme Document relating to the recommended offer by Silvestor UK Properties Limited, to be effected by means of a Scheme of Arrangement under section 425 of the Companies Act 1985, to Canary Wharf shareholders. The terms of Silvestor's offer were announced on December 5, 2003. Silvestor has announced that it also expects to post to Canary Wharf Shareholders the AIM admission document in respect of the Class B Shares in Silvestor Holdings which are being offered to Canary Wharf Shareholders under the terms of the Acquisition. The Scheme Document contains notices convening the Court Meeting and Extraordinary General Meeting to approve the Scheme which will both be held on February 23, 2004. The Independent Committee would also like to draw shareholders' attention to the announcement made by the Takeover Panel setting out the ruling of the Panel Executive that each of Mr. Paul Reichmann and Brascan Corporation must, by 6.00 p.m. on Friday February 13, 2004, either announce a firm intention to make an offer for Canary Wharf in accordance with Rule 2.5 of the Code or announce an intention not to make an offer, which, under Rule 2.8 of the Code, would be binding on them for six months from the date of such announcement. The Scheme Document is available from the Canary Wharf website, http://www.canarywharf.com Two copies of the Scheme Document will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at: The Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS Tel: 020 7066 1000 Dated: January 15, 2004 CONTACT: LAZARD Phone: 020 7187 2000 William Rucker Maxwell James CAZENOVE Phone: 020 7588 2828 Duncan Hunter Richard Cotton Credit Suisse First Boston (Joint Broker) Phone: 020 7888 8888 George Maddison Richard Crawley Brunswick Phone: 020 7404 5959 James Bradley Fiona Laffan CLARKS: Shut Down of Barnstaple Abbeyfield Operations Planned ------------------------------------------------------------- Clarks shoe factory in Barnstaple Abbeyfield is to close its factory in April in a move that is expected to leave 100 people out of work, according to North Devon Journal. Clarks chief executive Peter Bolliger said: "The decision to close a factory is always taken with deep regret because of the impact it has on local employees and in the wider community. "However, we can no longer justify the increasing losses we would make if we continued production at Abbeyfield." The firm fell victim to cheaper labor in Vietnam. Last week, representatives from the Chamber of Commerce, JobCentre, colleges and councils met to come up with a way to help people affected with the closure. Clarks also has operations in the U.K. at Ilminster, in Somerset, and Millam, in Cumbria. These plants are not affected by the decision. CORUS GROUP: To Invest EUR42 Million on German Aluminium Mill ------------------------------------------------------------- Corus is to invest EUR42 million (GBP29 million) in its aluminium rolling mill at Koblenz, Germany, as part of a successful strategy focusing its aluminium rolling mills on demanding, high added-value products and markets which include aerospace and automotive. The investment will also have substantial benefits for its aluminum operations at Duffel in Belgium. A major part of the investment is the introduction of cold rolling technology for a width up to 2800 mm. Wide cold rolled coil can then be solution heat treated at the state-of-the-art coil annealing and processing line in the Duffel rolling mill. This will enable Koblenz to supply wide aircraft sheet from coil feedstock, and widens Duffel's automotive body sheet (ABS) range from 1700 mm to 2300 mm. This investment will enhance Corus' position as a leading ABS supplier while aircraft sheet customers will benefit from additional capacity, flexibility and quality improvement. The investment will also expand significantly Koblenz's aircraft plate capacity, through improvements in the entire production route from cast house to testing equipment. Additional benefits are expected from new plate capabilities with regard to dimensions and innovative material tempers and properties. Examples are extreme wide rolling ingot dimensions and new heat treatment technologies. Engineering and construction for the project has started. First benefits are expected during Q4 2004 and final completion by end- 2005. Gerhard Buddenbaum, Director Corus Aluminium Division, said: "This project is a strong signal to the aerospace and automotive markets. The increased width capabilities and capacity increases, as well as new technology, will be welcomed by our customers. It shows our long-term commitment to these demanding market sectors. Note to Editors (1) The Koblenz plant currently produces 150,000 tons of sheet and plate products a year and employs 1250 people. It is one of the most sophisticated specialized rolling mills in the world and is a leading supplier to the aerospace industry, with a strong technology backup. It also supplies other transport sectors as well as general engineering and is a world leader in brazing sheet used for automotive and industry heat exchangers. (2) Corus is a multi-national, market-driven metals group which provides innovative steel and aluminium solutions to customers worldwide. Corus focuses on the construction, transportation, general engineering and packaging markets. Corus employs 50,000 people and has operating facilities in many countries with major plants located in the U.K., the Netherlands, Germany, France, Norway, Belgium and North America. Corus has also sales offices and service centers worldwide. EGG PLC: Fitch Places F1 Ratings on Rating Watch Evolving --------------------------------------------------------- Fitch Ratings, the international rating agency, has placed Egg Banking plc's Long-term 'A+' and Short-term 'F1' ratings on Rating Watch Evolving. The rating action follows the announcement from Egg's 79% shareholder, Prudential plc, that it is in talks over the sale of its stake. The Rating Watch also applies to all issues rated under Egg's EMTN and commercial paper programmes. At the same time the agency affirmed Egg's Support rating at '1' and Individual rating at 'C'. Egg's Long- and Short-term ratings are underpinned by the extremely high probability of support from Prudential plc (rated 'AA-'). While the Support rating has been affirmed, this will be reviewed once the outcome of the talks is known. Egg is a UK based bank operating mainly via the internet offering credit cards, unsecured loans, mortgages and deposit accounts. The bank concentrates on the sale of credit cards and has succeeded in creating a strong brand and a profitable operation, despite a short operating history. Egg believes that it has an approximate 4-5% share of the UK credit card market, as measured by balances outstanding, which is likely to prove attractive to a number of UK banks. Recent expansion of the business model to France has been unsuccessful and has adversely affected the profitability generated by the UK operations. Egg's management had begun to look for a strategic partner to share the costs of the French operations towards the end of 2003, but have had little success to date. These operations are likely to have less appeal to acquirers and their future looks likely to be short. KENNETH A FOGG: Clothing Manufacturing Equipment for Sale --------------------------------------------------------- Receivers of children's clothing factory The Kenneth A Fogg factory in Machynlleth plan to put up the company's factory unit, plant and machinery for sale. Receivers David Whitehouse and Simon Wilson of Kroll's Corporate Advisory and Restructuring Group based in Manchester came to the decision after concluding there is no hope of the business being sold as a going concern. "[C]ontinuing price pressures from lower cost countries, particularly in the Far East, have meant that it has been unable to operate profitably," said Mr. Whitehouse. The company's Stockport headquarters, which employs 29 staff, is carrying on work until existing orders are completed. The Kenneth A Fogg's 32 employees have already been dismissed. LEEDS UNITED: Proposes to Cut Players' Fees, Sell Big Names ----------------------------------------------------------- Leeds United's last-minute attempt to save itself from going into administration forced it to ask its players to take a 20% pay cut last week, according to The Star Online. Reports say the club called in Professional Footballers' Association boss Gordon Taylor for an emergency meeting with the club's entire playing staff to discuss a 20% deferral of wages for the length of their contracts Thursday. The English Premier League club was also considering selling popular stars, including Australian center-forward Mark Viduka, goalkeeper Paul Robinson and striker Alan Smith. Leeds United has to pay its GBP80 million debt to creditors today or go into administration. Chairman Trevor Birch was then hoping also that one of the three interested consortia, which include former deputy plc chairman Allan Leighton, Bahrain Sheikh Abdulrahman Al-Khalifa and Chinese businessman Xu Ming, could offer a rescue deal. But the parties are understood reluctant to make a bid until they are sure the club is not relegated from the Premier League. The listed club admitted none of the parties would make an offer for the company's shares, but it is certain they are willing to inject cash to pay off a proportion of the debt to the club's bond holders, who are owed GBP60 million. They are also interested in the club's assets, including the Elland Road ground. PNC TELECOM: Court Orders Discharge of Administration Order ----------------------------------------------------------- The Company announces that at Thursday's Court hearing the administration order over PNC Telecom plc was discharged. The administration order was discharged as the liabilities of the Company have been mitigated to the extent that the Company's solvency position has improved. The Company also announces that John Peett and Ian Gray have resigned as directors of the Company with immediate effect. Accordingly, the only current director of the Company is Geremy Thomas. A new Board will be constituted in the next few days and will meet to consider the future strategy of the Company. A request for restoration of trading in the Company's ordinary shares on AIM is expected. PPL THERAPEUTICS: Divests Laboratory Equipment For GBP192,000 ------------------------------------------------------------- PPL announces that, on January 14, 2004, it held a public auction to sell certain items of laboratory equipment from its research facility in the UK. The aggregate gross proceeds before selling expenses receivable by PPL in respect of the auction is GBP192,000. The proceeds will be received in cash prior to 31 January 2004. PPL will continue to provide further updates to shareholders at the appropriate time. WATFORD LEISURE: To Sell Majority Stake in Club to the Roussos -------------------------------------------------------------- Vegetable tycoons Jimmy and Vinny Rousso are poised to buy a major stake in Watford Leisure's ailing club, Watford, according to Evening Standard. Watford, which has been losing money since dropping out of the Premiership in 2000, lost GBP10.3 million last year. It its trying to raise GBP5.25 million to pay debts and buy back Vicarage Road's freehold, which they sold in 2002. The Roussos, who want to expand their business empire into football, are planning to plough GBP4.5 million into the club. They are also planing to issue new shares and launch "Buy back the Vic" campaign. The sell-off deal will result in the brothers becoming directors of the board of Watford Leisure. 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 2004. 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. 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