/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/040223.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, February 23, 2004, Vol. 5, No. 37 Headlines B E L A R U S BELARUSBANK: Long-term Rating Raised to 'CCC'; Outlook Stable BELPROMSTROIBANK: Assigned 'CCC' Long-term Rating C Z E C H R E P U B L I C IP BANKA: New Owner Seeks Dissolution of Bankruptcy Proceedings D E N M A R K CARLSBERG ASA: To Buy Orkla's Stake in Carlsberg Breweries CARLSBERG ASA: Pressures Seen to Mount after Orkla's Departure F I N L A N D BENEFON OYJ: Uncertainty of Reorganization Hits Sales F R A N C E BSN GLASSPACK: Rating Affirmed Following Owens-Illinois Deal BSN GLASSPACK: Moody's Considering Ratings Downgrade FRANCE TELECOM: Senior Unsecured Debt Raised to 'BBB+' GIVENCHY SA: Has New Chief Executive G E R M A N Y COMMERZBANK AG: Boasts of Strong Improvement in Operating Profit H U N G A R Y PARMALAT HUNGARIA: Bankruptcy Request Junked for Being Redundant N E T H E R L A N D S CELLCO FINANCE: Fitch Lifts Sub-notes Rating on Early Redemption N O R W A Y STOLT-NIELSEN: Reduces Stolt-Offshore Shareholding to 41% STOLT-NIELSEN: 2003 Full-year Net Loss Up by US$213 Million R U S S I A IMPULS: Court Sets Bankruptcy Hearing May 25 LESOKOMBINAT: Enters Bankruptcy Proceedings MAGNITOGORSKTRANSSTROY: Court to Assess Financial Health April MERIDIAN: Under Bankruptcy Surveillance Procedure NOVOSIBIRSK AVIA: Court Appoints Insolvency Manager OBNEFTEGAZSTROYMONTAZH: Bankruptcy Surveillance Ongoing * Fitch: Earnings of Russian Banks Remain Vulnerable S W E D E N SKANDIA INSURANCE: Expects Stock Market Changes to be Positive S W I T Z E R L A N D ABB LTD.: Reports US$767 Million Full-year Net Loss ZURICH FINANCIAL: Stops Losing Streak with US$2.1 Bln Net Income U N I T E D K I N G D O M BRITISH ENERGY: To Discuss Third Quarter Results February 26 BROW TOP: Appoints P&A Partnership Administrator EQUITABLE LIFE: Sells Covent Garden Property for GBP80 Million FLORIZEL LIMITED: Names Tenon Recovery Administrator J D CRANE: In Administrative Receivership KINGFISHER LEISURE: Ernst & Young Appointed Administrator LAKELAND BEEF: Names P&A Partnership Administrator MAYFLOWER CORPORATION: Issues Surprise Profit Warning MORGAN CRUCIBLE: Shakeup Bears Fruit; Operating Profit Up MORGAN CRUCIBLE: Unveils GBP54 Million Rights Issuance Plan MSM VEHICLES: Creditors Meeting Set February 27 PARAMOUNT EXPRESS: Creditors to Meet March 18 REAPE BROS: Annual Meeting Scheduled March 17 SCOTTISH WIDOWS: Enters Liquidation STEELCRAFT HOLDINGS: Winding Up Resolution Passed TELEWEST COMMUNICATIONS: Appoints Acting Chief Executive Officer UGIMAG LIMITED: Appoints Tenon Recovery Liquidator VAN SON: Names Ernst & Young Liquidator VIS ENTERTAINMENT: BAM Rescues State of Emergency 2 WEMBLEY PLC: To Post Circular on MGM MIRAGE Buyout Bid this Week YASUDA LIFE: Designates Bingham and Lovett Liquidators YORKSHIRE GROUP: Shareholders Okay Textile Dyes Business Sale ********* ============= B E L A R U S ============= BELARUSBANK: Long-term Rating Raised to 'CCC'; Outlook Stable ------------------------------------------------------------- Fitch Ratings upgraded Belarusbank's Long-term rating to 'CCC' from 'CCC-'. Belarusbank's other ratings have been affirmed at Short-term 'C', Individual 'E' and Support '5'. The Outlook for the Long-term rating is Stable. The upgrade reflects moderate improvement in the, albeit still weak, operating environment, and Belarusbank's close links with, and importance to, the state, including its participation in state-directed and state-subsidized lending programs to support the government's economic and social policy. In particular, the bank has become increasingly active in the government's state- directed residential mortgage lending scheme, which is set to expand further. Despite improving in 2003, Belarusbank's capitalization remains weak, particularly in light of the rising number of long-term loans on the balance sheet, a high level of fixed assets and low level of loan-loss reserves. Additionally, the bank has been loss-making (under International Accounting Standards) for the past six years at least, and profitability is unlikely to improve materially for the foreseeable future. Loan concentration levels by customer also remain relatively high at BBK and the funding base is, at least formally, short-term. Belarusbank also remains susceptible to state interference. These factors are all reflected in Belarusbank's Individual rating. Belarusbank is ultimately C. Sixty-percent-owned by the Council of Ministers of the Republic of Belarus and 40% by the Minsk Executive Committee and six regional authorities, the Belarusian government has stated its intention to remain majority owner of the bank until 2010 at the earliest. Belarusbank is the largest bank by assets and capital in Belarus. It was founded in 1922, but has been in its current form only since 1995, when a merger took place between State Belarus Savings Bank (the former regional office of Sberbank of the U.S.S.R.) and Joint-Stock Commercial Bank Belarusbank. Belarusbank dominates the retail market (c.60% share of retail deposits), where it benefits from an extensive nationwide branch network. Belarusbank is also very active in the corporate sector. CONTACT: FITCH RATINGS Lindsey Liddell James Longsdon London Phone: +44 (0) 20 7417 4222 Media Relations Campbell McIlroy London Phone: +44 20 7417 4327 BELPROMSTROIBANK: Assigned 'CCC' Long-term Rating ------------------------------------------------- Fitch Ratings assigned Belarus' Belpromstroibank ratings of Long-term 'CCC, Short-term 'C', Individual 'E' and Support '5'. The Outlook for the Long-term rating is Stable. Belpromstoibank's Long-term, Short-term and Individual ratings reflect the bank's small size, concentrated business, moderate performance, and the volatile economic and political environment of Belarus. While capital ratios appear good, Fitch notes that the quality and flexibility of capital is affected by the very high level of fixed assets. In addition, Belpromstroibank's Long-term rating takes into account its close ties to the Belarusian government; the bank is one of six banks considered by the authorities to be systemically important. The Support rating reflects Fitch's belief that, although there is likely to be a strong propensity on the part of the Belarusian authorities to support Belpromstroibank should it run into financial difficulty, the weak state of government finances means that timely support may not always be possible. Consequently Fitch believes support would be possible, but should not be relied upon. Credit risk resides mainly in the bank's loan portfolio, which grew very rapidly in 2003. Concentration is high both on the energy sector and by individual borrower. Although non- performing loans have been falling and loan loss reserve cover appears adequate, the loan book's rapid growth may give rise to higher levels of non-performing loans as loans season. Belpromstroibank's profitability is moderate. The bank is over- staffed and burdened by a very high cost base; its profitability is only supported by the high revenue-generating capacity of its operations. With margins coming under pressure, the bank needs to sustain its volume growth and cost containment measures if it is to maintain profitability at its current level. The bank's capital adequacy ratios appear good. However, the level of fixed assets is very high and the bank had no "free" capital at end-2002. In 2003, Belpromstroibank received a capital injection of BYR11 billion from the Belarusian government, which will have helped offset some of the pressure on capital ratios from balance sheet growth. Although Belpromstroibank can trace its roots back 80 years, the bank's history in its present form only dates back to 1991 when it was established from the Belarus branch of Soviet state bank, Industry & Construction Bank (Promstroibank) U.S.S.R. Belpromstroibank primarily services corporate customers, particularly state and private enterprises operating in the energy and manufacturing sectors. In the past couple of years it has also enjoyed some success in attracting retail deposits. CONTACTS: FITCH RATINGS James Longsdon London Phone: +44 20 7417 4309 Lindsey Liddell London Phone: +44 20 7417 3495 MEDIA RELATIONS Campbell McIlroy London Phone: +44 20 7417 4327 =========================== C Z E C H R E P U B L I C =========================== IP BANKA: New Owner Seeks Dissolution of Bankruptcy Proceedings --------------------------------------------------------------- IP Banka's new majority owner CSOB wants the bankruptcy order recently imposed on the bank lifted, Czech Happenings reports citing the Pravo daily. IP Banka was declared bankrupt February 6 due to excessive debts caused by extra tax. But CSOB, a unit of Belgium's KBC, doubts whether the decision was based on objective information, the Czech bank's lawyer, Radek Pokorny said. The bank has already made sure that a state supervisor monitor the course of the bankruptcy, he said. CSOB took over management of the bank from IPB in 2000. On Wednesday, CSOB became the owner of 46% of the bank as compensation for a disadvantageous transaction carried out by ex-IPB owner, Nomura. CONTACT: POKORNY & WAGNER Karoliny Svetle 301/8 110 00 Praha 1, Czech Republic, Phone: 00420 224 229 287-9 Fax: 00420 224 229 290 E-mail: pokwag@mbox.vol.cz Home Page: http://www.p-w.cz/en/index.html Contact: Radek Pokorny ============= D E N M A R K ============= CARLSBERG ASA: To Buy Orkla's Stake in Carlsberg Breweries ---------------------------------------------------------- Orkla is selling its 40% interest in Carlsberg Breweries to Carlsberg A.S.A. for NOK17.5 billion. Carlsberg A.S.A. will also take over Orkla's share of the company's liabilities, bringing total enterprise value of Orkla's interest up to NOK22.5 billion. The agreement implies that Orkla will receive DKK11 billion in cash and a debt certificate for DKK3.8 billion from a first class bank which falls due in two years' time and runs at a market interest rate. Orkla will also receive a dividend of DKK120 million from Carlsberg Breweries for 2003 and a sum to cover all transaction costs. The total proceeds from the Carlsberg Breweries shares will therefore be nearly DKK15 billion (NOK 17.5 billion). In addition to the proceeds, Carlsberg A.S.A. will take over Orkla's share of Carlsberg Breweries' liabilities, which amounts to approximately DKK4.5 billion. The enterprise value of Orkla's interest in Carlsberg Breweries will therefore be just over DKK19 billion, or approximately NOK22.5 billion. The sale will result in a book gain of NOK12.5 billion. The effect of the sale on Orkla's accounts and relevant key figures for evaluating the sale price are shown here http://bankrupt.com/misc/Carlsberg_Sale.pdf. Implementation of the sale is conditional upon the approval of Orkla's Corporate Assembly, which will discuss the matter at its meeting on March 3. Provided that the Corporate Assembly approves, settlement will take place at the beginning of March. When Carlsberg Breweries was established in 2000, Orkla's intention was to develop the values in Carlsberg Breweries in a long-term industrial perspective, with emphasis on profitable growth, efficient operations and commercial focus. This was to take place within a framework of good partnership between Carlsberg A.S.A. and Orkla, where Orkla would contribute its industrial experience and brand expertise. This was also Carlsberg A.S.A.'s attitude, and the basis for the agreement concerning the growth and development of Carlsberg Breweries that was entered into between Orkla and Carlsberg A.S.A. when Carlsberg Breweries was established in 2000. In Orkla's view, cooperation between Carlsberg A.S.A. and Orkla has been satisfactory until recently. However, in summer 2003 there was a change in the attitude of the Carlsberg Foundation and Carlsberg A.S.A. towards the partnership that had been established. The Carlsberg Foundation, which is the controlling shareholder in Carlsberg A.S.A., has increasingly expressed ambitions and attitudes that, in Orkla's view, would not promote value creation in Carlsberg Breweries and would weaken important intentions inherent in the cooperation agreement signed in 2000. The parties have therefore held increasingly differing views concerning the future development of Carlsberg Breweries. The natural solution for Orkla would have been to buy Carlsberg A.S.A. out of Carlsberg Breweries. This was impossible for several reasons. Orkla has therefore negotiated an agreement to sell its shares in Carlsberg Breweries to Carlsberg A.S.A. for a good price, and believes that this will best serve the interests of the Orkla Group and its shareholders. Orkla's shares in Carlsberg Breweries are owned by the Swedish company Orkla AB and the transaction will therefore be subject to Swedish tax regulations. According to the current Swedish tax regulations concerning the sale of shares in commercial enterprises, the payment received by Orkla AB will be tax-free. Orkla President and CEO Finn Jebsen comments: "Orkla would have preferred to further develop its industrial position in Carlsberg Breweries. However, the changed attitude of the Carlsberg Foundation and the increasing distance between the parties has led us to the conclusion that a sale at a good price is preferable. The Orkla Group has a solid foundation from which to pursue a long-term, profitable industrial growth on its own account, and the sale of the Carlsberg Breweries shares provides Orkla with substantial financial resources to realize such growth." The employee-elected members of Orkla's Board of Directors are of the opinion that a sale of Carlsberg Breweries shares is wrong for Orkla from an industrial point of view, and they have therefore been unable to support the resolution to sell the shares. After the sale, Orkla will be in a very strong financial position. Taking this into account, and also taking into account the fact that Orkla is celebrating its 350th anniversary in 2004, the Board of Directors will recommend to the General Meeting on April 29 that an extraordinary dividend of NOK25 per share be paid out (a total of more than NOK5.1 billion) in addition to the proposed ordinary dividend of NOK4.00 per share. The remainder of the proceeds from the sale of Carlsberg Breweries shares will be retained in the company as a basis for further industrial growth. CONTACT: CARLSBERG A.S.A. Ole Kristian Lunde Sr. VP Corporate Communications Phone: +47 22 54 44 31 Rune Helland VP Investor Relations Phone: +47 22 54 40 00 CARLSBERG ASA: Pressures Seen to Mount after Orkla's Departure -------------------------------------------------------------- Fitch Ratings said that Carlsberg A.S.A. acquisition of Carlsberg Breweries A.S.A. for DKK14.8 billion (EUR2 billion), largely through short-term debt, will considerably weaken the already stretched financial profile of the Carlsberg group without providing any additional cash flow or strategic benefits. As a consequence, the credit profile of Carlsberg Breweries A.S.A. is expected to deteriorate markedly, particularly given management's lack of clarity as to the ultimate debt structure of the group thereby affecting Carlsberg Breweries' existing bonds. "Buying out Orkla's stake has eaten into most of Carlsberg's financial flexibility. While management wants to 'work towards a swift de-leveraging', this resolution of a shareholder dispute has effectively compounded deteriorating financial flexibility without addressing Carlsberg's relatively weak strategic position," says Frederic Gits of Fitch Ratings. "At a time of consolidation in the European brewing sector, Carlsberg has inhibited its own capability to actively participate." The DKK14.8 billion (EUR2.0 billion) paid to Orkla for its 40% minority stake will be funded through DKK11 billion of debt and DKK3.8 billion of deferred consideration, funded mostly in the form of a rights issue of Carlsberg A.S.A. shares. Carlsberg Foundation, the parent of Carlsberg A.S.A., is prevented by its statute from allowing its shareholding in Carlsberg A.S.A. to fall below 51%. Prior to this acquisition it was 55% and following the transaction it will hit the 51% minimum. This lack of headroom prevents future equity-funded expansion. Fitch had already expressed its views that Carlsberg is operationally too thinly spread out, that its acquisition strategy has not been sufficiently addressed, and its low profitability compared with its European rivals is likely to be exacerbated by declining consumption in its main markets (see European Sector Brewing Report "Under Pressure in Consolidation Race" of December 2003, and Fitch's "Rationale Behind Carlsberg Acquisition of Holsten Not Obvious" comment of January 2004). Carlsberg A.S.A. is buying out Orkla's 40% minority stake following disagreement over the strategic orientation of Carlsberg Breweries. Fitch is concerned by Orkla's statement that Carlsberg A.S.A.'s "ambitions and attitudes would not promote value creation and would weaken important intentions inherent in the cooperation agreement." This suggests that, from Orkla's point of view, its original intention to develop Carlsberg Breweries "in a long-term industrial perspective, with emphasis on profitable growth, efficient operations and commercial focus," is no longer in-line with Carlsberg A.S.A.'s strategy going forward. At the Carlsberg A.S.A. level, pro forma net debt will more than double to c.DKK23 billion (EUR3.1 billion) from DKK9 billion (EUR1.2 billion) as at December 2003. This figure assumes the planned DKK3.5 billion rights issue will be successful. The Carlsberg Foundation has already announced that it would subscribe DKK1 billion of the latter. On the basis of FY03 EBITDA, stripping out the contribution of BBH and Unicer (since Carlsberg does not control their cash flows), this will result in Carlsberg A.S.A.'s consolidated leverage increasing from c.1.5x to c.4.4x EBITDA. From the perspective of the holders of Carlsberg Breweries' bonds (unrated), the most benign consequence will be that the hitherto moderate dividend of DKK263 million for FY02 (EUR35.3 million) is likely to be increased to service the new debt at Carlsberg A.S.A. level, whereas previously it held significant cash deposits. This dividend would become less discretionary in nature. The debt incurred by the parent may well, in the long- term, be funded at the Carlsberg Breweries level. This implies that the currently structurally senior bondholders of Carlsberg Breweries could lose their seniority to the now substantial amount of Carlsberg A.S.A.'s debt. As at year-end 2003, Carlsberg Breweries had DKK11 billion of interest-bearing debt whereas the pro forma Carlsberg A.S.A. has DKK23 billion. CONTACTS: FITCH RATINGS Frederic Gits London Phone: +44 (0) 20 7417 4230 Jonathan Pitkanen London Phone: +44 (0) 20 7417 4201 Media Relations Campbell McIlroy London Phone: +44 20 7417 4327 ============= F I N L A N D ============= BENEFON OYJ: Uncertainty of Reorganization Hits Sales ----------------------------------------------------- The sales of the company between October and December 2003 stayed on the level of the previous quarter. Especially regarding larger supply projects, the sales were adversely affected by the uncertainty of the reorganization solution. The company continued the cost cutting program and, in the industrial procedure, conducted at the end of the year new alternate forced leaves and forced leaves for the time being were agreed. Due to this, the number of actively employed personnel was reduced to about 90 and the cost of personnel was reduced further. On the other hand, the still continuing reorganization procedure incurred extra costs. The cash situation of the company has stayed very tight all the time risking the business and the continuation of the reorganization procedure. With the successful reorganization, the company would receive EUR1.5-2.0 million worth of equity funding. Customer service, production, sales and marketing have continued to function normally. As a result of product development, new terminal and software products and special solutions were introduced to the market and intensive R&D activity goes on. The published result is conditional to the confirmation of a reorganization program for the company. The reorganization procedure, crucial for the continuity of the company, was commenced on June 26, 2003, the related first reorganization program proposal was submitted to district court of Turku on September 10, 2003 and the second reorganization program proposal, modified according to the terms of the received investment offer, was submitted to court on December 19, 2003. The company has not been entitled to disclose the contents of the program proposal but its most central contents were outlined in the listing prospectus publicized on February 9, 2004. The listing prospectus is available at HEX Gate and at the head office of the company. In the market bulletin issued on February 9, 2004, there is also information about information not made public before, regarding the most central contents of the reorganization program, the investment agreement, the minimum amount of the agreed investment, the balance sheet structure of the company before and after the arrangement and the shareholdings in the company after the arrangement. In case a program proposal according to the program proposal would be confirmed for the company, the balance sheet of the company will materially differ from the balance sheet of the now published financial statements due to the debt arrangements that are a central element in the reorganization program proposal. In addition to the financial information per December 31, 2003 published now, there is also a balance sheet comparison compiled with the assumption that a reorganization program according to the program proposal would have been confirmed on the same day. This additional information should provide a useful outline about the balance sheet structure after the confirmation of the reorganization program and the connected equity funding actualized with the same. Developments in the period January-September 2003 The situation of the company in the beginning of year 2003 turned critical with the delays of the sought funding solution and on April 24, 2003, the company filed an application for statutory corporate reorganization. Due to the delayed processing of the reorganization application, the company requested and was granted extended schedule for the interim report 1Q2003. The Turku court of first instance decided on June 26, 2003, that the reorganization procedure applied for by the company will be started on that date. The extraordinary shareholders' meeting convening on the same day decided to confirm the financial report of FY2002 on the condition that the court will confirm the reorganization program devised in the procedure so that the company can again be considered to fulfill the criteria of a going concern. The same shareholders' meeting also decided to approve the proposed debt conversion equity issue in which the creditors of the company converted about EUR4.9 million worth of their receivables into shares and convertible equity bond loan. Consequently, the interim report of first quarter of 2003 issued on June 30, 2003, was also conditional to the confirmation of the reorganization program. Accounting for the draft reorganization plan, it comprised two special and significant extraordinary asset write-offs. The first one comprised the capitalization of the R&D expenditures of the new mobile telematics product platform worth EUR5.8 million. This because the completion of the development of the said product platform has had to be put on hold. The second one comprised a EUR2 million write-off of the parts inventory due to the devaluation of the parts inventory according to the prudently projected development of the sales and component consumption in the draft reorganization plan. In the same course, the interim report of the second quarter 2003, made public on August 12, 2003, was conditional to the confirmation of a reorganization program. In this report, in addition to the write-offs in the prior quarter, there was a further inventory write-off of EUR0.5 million for adjusting the valuation of the inventory. In addition, there was also a write-off of a total of about EUR1.3 million for extraordinary expenses and reservations related with the reorganization. Further, also the interim report of the third quarter 2003, made public on November 13, 2003, was conditional to the confirmation of reorganization program. Also the financial statements per December 31, 2003 are conditional to the confirmation of reorganization program. Business Environment The business environment stayed quite challenging but mobile telematics is seen as a promising growth market. Development of the business The business of the Company is to offer mobile telematics terminals, software and solutions for securing lives and property and for improving field management. The mobile telematics sales are directed to about 30 countries and in the third quarter the company received several new customers. The share of mobile telematics sales of all sales in 2003 was about 70% and the share is estimated to continue to grow. The range of GSM+GPS terminals covers personal security and field management applications, vehicular and machine communications (M2M) applications as well as asset tracking. Benefon can offer also software components and larger total solutions for system integrators and other business customers. In the third quarter, the new Benefon Seraph NT safety device was launched which already has created sales to both business and official customers. In the fourth quarter, the company introduced the new 3.0 version of Benefon Life Line control center software together with special versions of terminals. After the end of the reporting period, the company has introduced improved terminals Benefon Track Pro NT2.0, Benefon Seraph NT2.0 and Benefon Track One NT2.0. The objective is to continue the market introduction of new terminal and software products and product versions on regular basis. The acquisition offer made for Ismap S.A. has had to wait further for the stabilization of the situation of the company. Elcoteq-Agreement The business activity according to the Elcoteq agreement signed in August, 2002, proceeded in broad terms as planned until the company in spring 2003 had to put in hold the development work related with the agreement. Altogether, of the EUR11 million purchase price of the agreement, EUR8.5 million were booked in 2002 and EUR2.5 million in 2003. Incurred expenses caused by the discontinuation of the planned activities are included in the financial statements of FY 2003. Financial Performance in the Period The result report is made on the condition a reorganization program materially according to the program proposal submitted on December 19, 2003 will be confirmed for the company. The net sales in the fourth quarter October-December 2003 were EUR1.7 million, or same as the net sales in the third quarter. The net sales in the entire period January-December 2003 were EUR6.7 million. The net sales in the fourth quarter of the previous year 2002 were EUR2.1 million and the net sales in the entire period January-December 2002 were EUR14.7 million. The operating result before one-off items in the fourth quarter October-December 2003 was -EUR0.9 million, which was EUR0.1 million better than the operating result before one-off items of -EUR1.0 million in the third quarter. The operating result before one-off items in the entire period 1-12/2003 was -EUR5.1 million. Because of the situation and proceedings of the company during the year, there was an exceptional amount, a total of EUR15.1 million, of one-off expense items mainly caused by the massive situational write-offs of R&D expenses and inventories over the year. In the final quarter, the total of one-off expenses was EUR5.8 million, mostly of inventory write-offs but including also some receivable write-offs and expense reservations. The actual operating result after one-off expense items in the fourth quarter October-December 2003 was -EUR6.7 million, in third quarter July-September 2003 EUR-1.2 million, in second quarter April-June 2003 -EUR2.2 million and in the first quarter January-March 2003 -EUR10.1 million. In the fourth quarter October-December 2002 of the year before, the operating result was -EUR2.3 million and in whole year January-December 2002 it was -EUR8.1 million. The total of the balance sheet at the end of the third quarter October-December 2003 was EUR6.1 million. The total of the balance sheet at the end of the previous quarter July-September 2003 was EUR13.8 million. After the write-offs in early year 2003, there have been no R&D capitalizations in the balance sheet. At the end of the fourth quarter October-December 2002 a year before the total of the balance sheet was EUR23.9 million, including R&D capitalization of EUR5.4 million. The amount of Shareholders' equity at the end of the quarter October-December 2003 was -EUR13.8 million, in addition of which was the equity loan of EUR1.7 million, when at the end of quarter July- September 2003 it was -EUR5.4 million. The drop was mainly due to the said inventory write-offs. The total liabilities was reduced in quarter October-December 2003 by EUR1.0 million and at the end of the period they were EUR18.2 million, all of it current liabilities. The interest-carrying net debt at the end of quarter October-December 2003 was about EUR7.2 million. Cash at hand and in the banks totaled EUR0.1 million at the end of the period. The EUR4.9 million write-offs made in the final quarter of 2003 are based on cautious estimate of the usage of the components in stock during the reorganization procedure. Most of the said off-written components are used in the currently offered and sold product range. The deteriorated liquidity of some customers interfered with the business in the final quarter and caused the booked credit loss reservations of a total of EUR0.4 million. Also the lengthening of the reorganization procedure and the significant amount of human resources required for assembly of the overall reorganization package has taken its toll in the sales and financial development of the company in the final quarter of 2003. The investor has participated in the conduct of the business of the company, and the investor and the private investors have provided guarantees for the liabilities of the company. Report on Sufficient Liquidity in Period January 2004-March 2005 The account on the sufficient cash flow provided hereinafter is based on the prepared business plan presuming the approval of the reorganization program. The quarterly sales revenue being a central factor in the operating result, the starting point of the account is estimated to increase in the reported period. The current order stock does not make a significant part of the estimated sales in the period. The cash flow account assumes that an equity funding of the amount according to the proposals made to the extraordinary shareholders' meeting convening on February 26, 2004, will be realized, and that the arrangement of the reorganization debt according to the reorganization program proposal submitted to Turku district court will take place. Cash flow account of period January2004-March2005 (EUR million) Operating result before extraordinary item -1.2 Depreciations 0.4 Reduction of current receivables -0.1 Reduction of inventories 1.6 Change of non-interest bearing debt -0.7 Payment of reorganization debt -0.4 Paid interests -0.1 Investments -0.1 Paid share issue 1.6 Extraordinary income 0.0 Reservation for reorganization expenses -0.2 Change of loans 0.0 Change of cash at hand and in the banks 0.8 Should the actual sales or other development from current estimates it may significantly affect the construed cash flow account. Investments The investments in the third quarter October-December 2003 were EUR0.0 million. Personnel The number of actively employed personnel at the end of the fourth quarter October-December 2003 was 129, of which large share were on alternating forced leaves. This was 2% below the corresponding number 132 at the end of the previous quarter July-September 2003 and 12% below the corresponding number 146 at the end of the fourth quarter October-December 2002. Special Measures for Improving the Finances The cash situation of the company has continued to be very tight and, therefore, the program for further cost cutting, for increasing sales and sales margins and for establishing a healthy balance sheet and cash situation through reorganization solution and related equity funding has remained a key area in the operations of the company. The fixed cost level is approaching one third of the cost level of that of a year ago. Future Outlook The future outlook of the company depends in a decisive manner on the confirmation of the reorganization program proposal resulted from the reorganization procedure started in June 26, 2003. The confirmed reorganization program prescribes positive cash flow and that the company will reach also positive result and, further, that the debt is re-arranged within the payment margin in a way that the amount of the shareholders' equity will meet the legal requirements. The core of the draft reorganization plan consists of the significant reduction of the costs and of gradual increase of the sales. The company is also receiving EUR1.5-2.0 million of equity funding from the investment connected with the reorganization solution. The most important uncertainty factor in the future outlook is actualization of sales forecasts, as the amount of solid order stock is low. The business outlook for 2004 is partially based on new products in development, and delays in market introduction of these new products may also adversely affect the sales and financial result of the company. It should also be noted that in the proposed arrangements the effective control of the company will transfer to the new main shareholder, which may affect the future outlook of the company. Share Issues In Year 2003 Xpediant share issue The Board of Benefon Oyj decided in its meeting of March 10, 2003 and with the authority by the Annual Shareholders' Meeting of May 17, 2002 and registered in the trade register on June 18, 2002, to increase the share capital of the company with a share issue directed to Xpediant LLC, a subsidiary of NRJ International LLC, by a maximum of 445,203.54 euros by offering for subscription a maximum of 1,323,530 new S-shares of the company with a book equivalent value of EUR0.34 (not exact value) at the total subscription price of EUR450,000. The offered shares were eventually subscribed only in part so that Xpediant subscribed a total of 294,117 shares by paying the subscription price of EUR99.999.78 according to the subscription terms on the bank account of the company. The share capital of the company was increased by EUR99.933.86 by issuing 294,117 new S-shares with a book equivalent value of EUR0.34 (not exact value). The increase was registered on April 2, 2003. As a result, the share capital rose from EUR3,282,922.05 to EUR3,381,855,91 and the number of outstanding shares from 9,759,684 shares to 10.053.801 shares of which the number of listed S-shares was 9,553,801. The new shares were listed for trading along with the existing shares on May 21, 2003. Debt conversion equity issues Share issue The extraordinary shareholders' meeting of June 26, 2003 decided to offer, deviating from the first right of shareholders, the creditors of the company and a maximum of five domestic and foreign investors for subscription shares and convertible equity bond loans so that the combined number of subscribers was no more than 100. The creditors could subscribe the shares and equity bond loans in set-off. The share capital was increased in the share issue by 2,988,744,22 euros by offering to creditors and investors for subscription 8,885,133 new S-shares of the company with book equivalent value of EUR0.34 (not exact value) all of which were subscribed by creditors. As a result, the share capital of the company rose by EUR2,988,744,22 to EUR6,370,600,13. Equity bond loan issue In addition, the extraordinary shareholders' meeting of June 26, 2003 decided to increase the share capital by issuing a convertible bond loan on equity terms (Equity bond loan 2003A). In the issue, share capital was increased be a maximum of EUR1,731,579,15 by offering to 12 creditors of the company for subscription an equity bond loan with a capital of a maximum of EUR1,750,237,42. Of the loan were issued transferable bonds of a minimum of one euro each, which as a total can be converted into a maximum of 5,147,751 new S-shares of the company. The creditors subscribed the bond loan in set-off. The bonds were delivered after the loan was registered and the loan was not listed for public trading. Equity Issue Authority Of The Board The ordinary Shareholders' Meeting of May 21, 2003, authorized the Board of Directors, within the time limit of one year from the meeting granting the authorization, to decide on the increase of share capital by rights issue, issue of options or convertible bonds in one or more installments such that in the issue of convertible bonds or options or in the rights issue, in total a maximum of 2,010,760 new investment shares with a book parity value of EUR0.34 (not the exact value) per share, shall be entitled to be subscribed for. The share capital may, based on the authorization, therefore be increased by a maximum of EUR 676,371.12. The authorization includes the right to deviate from the pre- emptive right of the shareholders, referred to in Chapter 4, Section 2 of the Companies Act, to subscribe for new shares, convertible bonds or options and the right to decide on prices of the subscriptions, those entitled to subscription, the terms and conditions of the subscription and the terms and conditions of the convertible bonds and options. The authorizations may be used in deviation from the shareholders' pre-emptive right provided that there is a weighty financial reason from the company's point of view, such as financing of corporate acquisition or other arrangement relating to the development of the company's business operations or strengthening the company's balance sheet, to do so. When the share capital is increased by a rights issue on other basis than convertible bonds or options, the Board of Directors is authorized to decide that the shares can be subscribed for in kind, using the right of set-off or on other specific terms. For the time being, this authority has not been used. To see financial statements: http://bankrupt.com/misc/Benefon_2003.htm CONTACT: BENEFON OYJ Jukka Nieminen President =========== F R A N C E =========== BSN GLASSPACK: Rating Affirmed Following Owens-Illinois Deal ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Owens-Illinois Inc. on CreditWatch with negative implications, following the company's announcement that it had entered into exclusive negotiations to acquire France- based BSN Glasspack S.A. ('B+'/Stable/--), the second-largest producer of glass containers in Europe for about $1.46 billion (EUR1.16 billion) including the assumption of debt. An agreement is expected to be reached shortly, and the acquisition is expected to close in the second quarter of 2004, subject to regulatory approvals. If the transaction is completed as proposed, Toledo, Ohio-based Owens-Illinois' total debt pro forma for the acquisition at December 31, 2003, would climb to about $7 billion from about $5.4 billion. At the same time, Standard & Poor's assigned its 'BB-' senior secured bank loan rating and a recovery rating of '3' to the company's proposed $1.4 billion senior secured tranche C term loans due April 2008, based on preliminary terms and conditions. The new senior secured bank loan rating was placed on CreditWatch with negative implications, along with the existing ratings on Owens-Illinois to reflect the strong likelihood that all ratings, including the new and existing bank loans, will be lowered upon completion of the BSN transaction. The bank loan ratings are the same as the corporate credit rating; this and the '3' recovery rating indicate the expectation of a meaningful (50%-80%) recovery of principal in the event of default. Proceeds of the tranche C term loans are expected to be used to finance the BSN acquisition, refinance certain BSN debt, and for fees and expenses. The proposed tranche C term loans consist of a $671 million U.S. tranche C term loan, a $381 million European tranche C term loan, and a $386 million European tranche C delayed draw term loan. Proceeds of the delayed draw tranche C term loan would be used to refinance existing BSN subordinated notes to the extent noteholders exercise their change of control put rights (about EUR306.4 million if all noteholders exercise put rights). Concurrently, Standard & Poor's affirmed its ratings on BSN, including the 'B+' corporate credit rating. If the transaction is successfully completed, and if the existing BSN senior subordinated notes are put (and refinanced with the European tranche C delayed draw term loan), ratings on the notes will be withdrawn. "The CreditWatch placement reflects the potential integration- related challenges of the BSN acquisition and the significant increase in financial pressures stemming from the debt-financed transaction," said credit analyst Liley Mehta. Standard & Poor's expects that proceeds from the sale of the blow-molded plastic operations, if completed as proposed, will be used for debt reduction, although the timing and valuation of these assets remains uncertain. Other material credit concerns include the continuing pressures from asbestos-related liabilities, the sub-par financial profile, and significant refinancing risks in 2007 and 2008. Subject to the BSN transaction being completed as proposed, Standard & Poor's will lower its corporate credit rating on Owens-Illinois to 'B+' from 'BB-', and accordingly, all other ratings would be lowered by one notch. The outlook likely would be stable reflecting the underlying strength of Owens-Illinois' businesses and Standard & Poor's expectation that management would take actions to improve free cash generation and credit measures, and that refinancing pressures will be addressed. Standard & Poor's will monitor developments and will resolve the CreditWatch upon successful completion of the proposed acquisition and related debt financing. BSN GLASSPACK: Moody's Considering Ratings Downgrade ---------------------------------------------------- Moody's Investors Service placed all of the ratings of French glass container manufacturer, BSN Glasspack S.A., on review for possible downgrade. The rating action follows the agreement of shareholder Glasspack Participations to sell its shareholding in BSN to Owens-Illinois Inc. The ratings affected are: (a) The Ba3 senior implied rating at BSN Glasspack S.A.; (b) The bank debt facilities at BSN Glasspack S.A. at Ba3; (c) The B1 senior unsecured issuer rating at BSN Glasspack S.A.; (d) The EUR160 million senior subordinated notes due 2009 at BSN Glasspack Obligation S.A. at B1; and (e) The EUR140 million (previously EUR180 million) in senior subordinated notes at BSN Financing Co. S.A. at B2. Moody's said it will confirm and withdraw the ratings for the bonds should both BSN's senior subordinated note holders and senior secured creditors exercise their put options in case the company is sold, or if the bonds were tendered above par as part of a refinancing. Refinancing of the rated bank loans would result to the same effect, the rating agency said. FRANCE TELECOM: Senior Unsecured Debt Raised to 'BBB+' ------------------------------------------------------ Fitch Ratings upgraded France Telecom S.A.'s Senior Unsecured rating to 'BBB+' from 'BBB'. The Short-term rating of 'F2' has been affirmed. The Rating Outlook remains Positive. The rating action follows the release of France Telecom's FY03 annual results showing stronger-than-expected operating, cash flow and de-leverage performance. Its net debt has been reduced by EUR23.8 billion in FY03, thanks to a EUR15 billion rights issue, EUR6.1 billion of net free cash flow (EUR2.4 billion in FY02) and EUR3.2 billion of net disposals of non-core assets. Net free cash generation has been underpinned by a reduction in operating expenditure (both external purchase of services and goods, and staff costs), capex and working capital, reflecting better-than-expected savings achieved under France Telecom's TOP operating performance improvement program. Its core domestic fixed-line business cash generation has improved, thanks to a stabilization of EBITDA as a result of TOP program savings and lower capex. Orange mobile operations continue to be France Telecom's main EBITDA growth driver. Margins improved in the France and U.K. core operations, due to an increase in revenues per subscribers and a decline in subscription acquisition costs. The customer base continues to develop at a fast pace in emerging markets. The group structure has been streamlined since the buy-out of Orange minorities in H203. Credit metrics are now well in line with the 'BBB+' rating category. On a reported basis, net debt to EBITDA fell to 2.6x at FY03 from 4.6x at FY02. Net fixed charge cover, which is a better credit measure as it takes into account France Telecom's operating lease exposure and the coupon paid on the perpetual subordinated convertible debt, reached 2.1x in FY03 (1.5x in FY02). France Telecom enjoys a solid liquidity profile. Irrespective of FY04 free cash generation, the group has enough resources to cover its short-term liquidity needs. France Telecom issued EUR2.5 billion of bonds in January 2004 and had total undrawn committed bank facilities amounting to EUR12 billion in February 2004. France Telecom has EUR9 billion of long-term debt maturing 2004 and is very likely to pay EUR2 billion to Equant minority shareholders in July 2004 in respect of a commitment undertaken in November 2000. France Telecom has a further EUR8.4 billion of debt as well as a EUR2 billion off-balance sheet commitment related to its obligation to acquire the stake held by Kulczyk in the Polish telecom operator, TPSA between October 2003 and 2007. There is no major refinancing after 2005. Fitch believes current operating and cash flow performance to be sustainable. France Telecom targets EUR18 billion of EBITDA in FY04 (EUR17.3 billion in FY03). As operating expenditure and capex savings seem already well on-track, management is now concentrating on top-line growth, which implies an aggressive broadband Internet strategy. France Telecom has to cope with increasing competition in the broadband Internet market as the effect of local loop unbundling has started to be felt in France since Q403. In spite of a resumption of dividend payout in FY04, cash generation should remain sizeable and should support the company's de-leveraging. France Telecom has confirmed its FY05 de-leverage target of net debt to EBITDA at below 2x. CONTACT: FITCH RATINGS Olivier de Combarieu, CFA Paris Phone: + 33 1 44 29 91 26 Raymond Hill London Phone: + 44 20 7417 43 14 Media Relations Campbell McIlroy London Phone: +44 20 7417 4327 GIVENCHY SA: Has New Chief Executive ------------------------------------ Marco Gobbetti of Italian fashion company, Moschino, was named chief executive of Givenchy, the troubled fashion house owned by LVMH, according to The New York Times. Bernard Arnault, the chairman and chief stockholder in the international luxury conglomerate LVMH is hoping the Givenchy brand could become a big brand again, like Christian Dior. The business is currently struggling to breakeven. Its perfume licenses bring in big contribution to revenue, but its clothing line is performing badly. Founded in 1952, Givenchy is involved in haute couture, ready-to-wear, shoes, leather goods & accessories. CONTACT: GIVENCHY 3, avenue George V 75008 Paris - France Home Page: http://www.givenchy.fr LVMH HOLDING 22, avenue Montaigne 75008 PARIS FRANCE Phone: (33) 1 44 13 22 22 ============= G E R M A N Y ============= COMMERZBANK AG: Boasts of Strong Improvement in Operating Profit ---------------------------------------------------------------- In the past business year, Commerzbank achieved its expected and promised return to profit. The bank's operating profit showed a considerable improvement of more than EUR350 million on 2002. In view of these figures, its chairman, Klaus-Peter Muller, said at the press conference to present the bank's 2003 results that the current year would be one of fresh initiative with controlled expansion. As an example, he cited the talks with SchmidtBank in Hof for a takeover of its branch business. The talks are promising, he commented. Last year, Commerzbank did its homework diligently and successfully, said Mr. Muller. It cut its costs far more strongly and rapidly than planned and has already achieved its 2004 cost target. The core capital ratio has been held steady at 7.3% and the risks contained in the balance sheet have been reduced to a minimum, he added. This has created scope for earnings-oriented growth and new initiatives to strengthen current business transactions. At the same time, non-strategic investments are to be sold on a larger scale. 2004 target: Clearly higher earnings Following its successful consolidation, Commerzbank plans a further substantial improvement in its results, drawing support from a more favorable set of economic data. Mr. Muller expects both significantly higher net interest income and rising commission revenues, as well as a stronger trading profit. He foresees another reduction in provisioning to less than a billion euros. On the other hand, measures to boost earnings call for additional investments, which will cause operating expenses to rise slightly after two years of strict cost controls. All in all, Commerzbank's goal is to earn by 2005 today's capital cost of around eight percent. Plus the Bank plans to lower its cost/income ratio nearer to its goal of 65%. "These figures show," Mr. Muller said, "that Commerzbank has successfully performed its radical restructuring, is well- positioned in its core areas and will be perceived as an attractive bank again by the public, analysts and rating agencies." Mr. Muller expressed his confidence regarding the future in the words: "After a difficult adjustment phase, I can state that, together, we have turned the ship round and are now getting under way again." Given this perspective, it is quite natural that Commerzbank is continuing to plan on a stand-alone basis. "However, entirely in the interest of our shareholders, customers and staff, we remain open to any reasonable solution involving others, whether at the national or international level," said Mr. Muller, summing up his pragmatic approach to banking consolidation. 2003 figures reflect clean-up With provision for possible loan losses lower, the income statement for last year reflects the double strike, consisting of an extensive revaluation of the investments and securities portfolio, on the one hand, and a capital increase in an amount of EUR760 million, on the other. The clean-up and restructuring expenses of altogether EUR2.43 billion gave rise to a negative group pre-tax profit of EUR1.98 billion. As at the same time the good earnings performance of some subsidiaries caused tax expenses to soar, the net loss for the year ultimately stood at EUR2.32 billion. No dividend payment will be made, therefore. However, the bearers of profit-sharing certificates will receive a full payment. Despite the high loss, the bank's equity rose to EUR9.1 billion at year-end. For one thing, subscribed capital was lifted by the capital increase; for another, the revaluation reserve moved from its previous minus to a comfortable plus of EUR1.24 billion. New initiatives for retail and corporate customers Last year brought progress not only for Commerzbank as a whole but also in its core competencies. The operating profit in Retail Banking, for instance, expanded sharply to EUR258 million, or a return on equity of 14.3%. Mr. Muller pointed out that the result of this business line had improved by more than EUR500 million since 2001. As part of its "grow-to-win" strategy, Commerzbank will now focus more strongly on higher-margin business such as building finance, fund and securities products as well as such attractive groups of customers as business clients and the self-employed. Mr. Muller reiterated his ambition to become Germany's best retail bank nationwide. Asset Management also developed positively. The disposal of subsidiaries in the USA and Italy proved to be the right step. For this reason, too, the operating profit rose significantly from EUR13 million to EUR90 million. Mr. Muller expressed his conviction that this business line has really good potential. In the Corporate Customers and Institutions segment, the heavy dependence on economic performance and interest rates had a negative impact, with the operating profit down by more than a fifth. For this reason, Commerzbank will put its main effort this year into strengthening corporate banking, which is to be promoted substantially under the slogan "Move to the top." The main focus will be on clearer support for Mittelstand firms and larger corporates. A Mittelstand offensive is designed both to strengthen the relationship with existing customers and to acquire new ones. The target, explained Mr. Muller, is to gain 9,000 new corporate customers by end-2006. This would mean that 45% of firms, instead of the present 39%, had an account with Commerzbank. The initiative "Mezzanine for the Mittelstand," which is unique to date in Germany, is also intended to make its contribution. With this subordinated capital, up to now reserved for major companies, the bank wants to improve the financial scope for Germany's smaller businesses and help alleviate their chronic shortage of capital. For this purpose, it is making available the sizeable amount of EUR300 million. The largest swing in its operating profit was registered by Securities. On the one hand, its trading profit expanded strongly; on the other, its operating expenses were cut considerably. In the final analysis, a small operative plus remained -- compared with a large minus in the previous year. Mr. Muller reported that the segment had got off to a very encouraging start in 2004. Its most important task, he said, is to reduce the dependence on volatile market influences and to hold the trading profit steadier. The chairman believes that this can primarily be achieved through close meshing with the bank's corporate activities. CONTACT: COMMERZBANK AG Corporate Communications-Press Relations Phone: +49 69 136-22830 Fax: +49 69 136-22008 E-mail: pressestelle@commerzbank.com ============= H U N G A R Y ============= PARMALAT HUNGARIA: Bankruptcy Request Junked for Being Redundant ---------------------------------------------------------------- The Fejer County Court did not accept the bankruptcy filing of troubled dairy group, Parmalat Hungaria Rt, according to Budapest Sun. This was because a similar filing from a consortium of five Parmalat creditors had already been lodged. Orsolya Giesz, spokesperson for the court, said Parmalat Hungaria's application only arrived February 2; the creditors submitted their filing January 29. Four liquidation claims have already been rejected for lack of various details, the spokesman said. In one case, an eight-day deadline had not yet expired, she related, according to the report. Meanwhile, Miklos Istvanfalvi, a spokesman for the dairy farmers' consortium, said suppliers with total claims of HUF409 million (US$1.9 million) have initiated liquidation proceedings against the company. ===================== N E T H E R L A N D S ===================== CELLCO FINANCE: Fitch Lifts Sub-notes Rating on Early Redemption ---------------------------------------------------------------- Fitch Ratings has withdrawn its 'B-' rating on Cellco Finance N.V.'s $300 million 15% senior subordinated notes due 2005. The withdrawal follows the early redemption of whole $300 million notes in accordance with callable provisions of the indenture. Cellco is the guaranteed special purpose-financing vehicle of Turkcell, Turkey's largest provider of GSM telephony services. The early redemption is in line with Turkcell management's debt repayment and refinancing efforts, which should further improve the company's balance sheet. Fitch's ratings on Cellco's other liabilities remain. On 16 February 2004, the rating on Cellco's $400 million 12.75% senior unsecured due 2005 notes was upgraded to 'B+' from 'B' following the sovereign upgrade on Turkey on February 9, 2004. Cellco's senior notes were channeled downstream to Turkcell via an issuer credit agreement, making Turkcell's obligations to Cellco under this agreement rank equal in right of payment to all of Turkcell's senior indebtedness. Turkcell's Long-term foreign currency rating was also upgraded to 'B+' from 'B' with the Outlook changed to Stable from Positive on February 16, 2004. Meanwhile its Long-term local currency rating was affirmed at 'B+' with Positive Outlook. CONTACT: FITCH RATINGS Guzin Durmus, Istanbul Phone: +90 212 279 1065 Albert Hofman, London Phone: +44 207 417 4282 Media Relations Campbell McIlroy, London Phone: +44 20 7417 4327 =========== N O R W A Y =========== STOLT-NIELSEN: Reduces Stolt-Offshore Shareholding to 41% --------------------------------------------------------- Stolt-Nielsen S.A. (NasdaqNM: SNSA; Oslo Stock Exchange: SNI) sold two million shares of Stolt Offshore S.A. The shares were sold at the market price of 24 Norwegian Kroner per share (approximately US$3.46 per share at current exchange rates). In line with normal settlement practices, the sale is expected to close on February 25, 2004. Stolt-Nielsen S.A., through its wholly owned subsidiary, Stolt- Nielsen Transportation Group (SNTG), retains approximately 41 percent economic and voting interest in Stolt-Offshore. Stolt- Nielsen expects that, assuming no other changes to Stolt- Offshore's share capital, its ownership interest in Stolt- Offshore will increase, but remain below 50 percent following both the completion of Stolt-Offshore's previously announced plans to raise up to $50 million in a subsequent equity issue and the conversion of $50 million of subordinated debt owed to Stolt-Nielsen by Stolt-Offshore into 22.7 million Stolt-Offshore Common Shares. Upon completion of these actions, Stolt-Nielsen expects to have an approximately 43% ownership interest in Stolt-Offshore. "We can now deconsolidate Stolt-Offshore for financial reporting purposes. This will simplify Stolt-Nielsen's balance sheet and allow us to achieve compliance with the financial covenants contained in our original borrowing arrangements with our primary creditors," said Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen. "We will continue working closely with our primary lenders." About Stolt-Nielsen S.A. Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 41 percent of Stolt-Offshore S.A. (NASDAQNM: SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt-Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly- owned by the Company, produces and markets high quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon, caviar, bluefin tuna, and tilapia. CONTACT: STOLT-NIELSEN S.A. Richard M. Lemanski, U.S.A. Phone: 1 203 625 3604 E-mail: rlemanski@stolt.com Valerie Lyon, U.K. Phone: 44 20 7611 8904 E-mail: vlyon@stolt.com STOLT-NIELSEN: 2003 Full-year Net Loss Up by US$213 Million ----------------------------------------------------------- Stolt-Nielsen S.A. (NasdaqNM: SNSA; Oslo Stock Exchange: SNI) reported results for the fourth quarter and the year ended November 30, 2003. Net loss for the fourth quarter was $216.3 million, or $3.94 per Common share, on net operating revenue of $684.2 million, compared with a net loss of $101.1 million, or $1.84 per share, on net operating revenue of $827.7 million for the same quarter in 2002. The basic weighted average number of shares outstanding for the fourth quarter of 2003 and 2002 was 54.9 million. Net loss for the year ended November 30, 2003 was $315.9 million, or $5.75 per Common share, on net operating revenue of $3,017.6 million, compared with a net loss of $102.8 million, or $1.87 per share, on net operating revenue of $2,908.1 million for the same period in 2002. The basic weighted average number of shares outstanding for fiscal 2003 and 2002 was 54.9 million. Further detail of certain significant items contained in the results is shown here http://bankrupt.com/misc/StoltNielsen_2003.pdf. "Fiscal 2003 was a difficult and frustrating year for Stolt- Nielsen," said Niels G. Stolt-Nielsen, Chief Executive Officer. "I am glad it is over. Over the last six months, Stolt-Nielsen has raised over $210 million in liquidity and reduced its indebtedness by over $187 million, while at the same time negotiating three short-term waivers and one conditional longer- term waiver with our lenders. In January we successfully completed a $104 million private placement of the 7.7 million Common shares we held in treasury. We are pleased and encouraged by the strong support our company has in the capital markets. Since July, we have also raised over $100 million via sale/leaseback transactions and the sales of non-strategic assets. "In Stolt-Offshore (SOSA) the new management, headed by Mr. Tom Ehret, has been working very hard to limit the losses on the unfortunate 'legacy' contracts, which have caused us much damage, and to reorganize and re-focus Stolt-Offshore, reduce workforce and restructure senior management with new appointees. Still, Stolt-Offshore reported a loss of $416.4 million for the year after $183.1 million write down of assets. "Stolt-Offshore has commenced a process which, when completed in the second quarter this year, will increase its shareholders' equity by $200 million and provide $100 million of performance bonds from certain of its banks. Of this, $100 million equity is now in place as well as the performance bonds. Stolt-Nielsen has agreed to convert its subordinated $50 million loan to Stolt-Offshore, into equity at the same terms as the new equity, and Stolt-Offshore will do a subsequent issue of $50 million to existing shareholders who did not participate in the first issue. Stolt-Nielsen has as part of this process agreed to convert its 34 million Stolt-Offshore Class B shares into 17 million Stolt-Offshore Common shares. "As a result of the actions taken by the two companies in recent months, Stolt-Offshore will shortly be deconsolidated for financial reporting purposes from Stolt-Nielsen, and as a result Stolt-Nielsen expects to be in compliance with the financial covenants in its original borrowing arrangements. Stolt-Nielsen continues to work closely with its primary lenders." Stolt-Nielsen Transportation Group (SNTG) "For the full year, Stolt-Nielsen Transportation Group reported income from operations of $83.8 million in 2003, compared with $123.8 million in 2002," Mr. Stolt-Nielsen continued. "Stolt-Nielsen Transportation Group's parcel tanker division's income from operations in 2003 was $65.3 million, compared with $92.8 million in 2002. The 2003 figure includes $15.5 million of costs related to the legal issues in Stolt-Nielsen Transportation Group and $7.5 million of costs for the wind-up of Stolt-Nielsen Transportation Group's U.S. flag joint venture. The remaining $4.5 million of the decline in income from operations was attributable to higher bunker costs and a weaker U.S. dollar in 2003. For the year, the Stolt Tanker Joint Service Sailed-in Time Charter Index was 5% lower in 2003 versus 2002. "As a result of the overall pickup in global economic conditions, the spot market is now strong, with rates rising on average some 25% on major trade lanes. An industry order book for parcel tanker new buildings of only 12.5% of the core competitive existing fleet, combined with a continued recovery in the global economies, should bode well for an improvement in Stolt-Nielsen Transportation Group's results going forward. "Stolt-Nielsen Transportation Group's tank containers division delivered slightly weaker results in 2003, with income from operations of $18.7 million in 2003 versus $21.7 million in 2002. The decline was almost exclusively due to higher administrative and general costs, partially as a result of a weaker U.S. dollar. Business operations remained strong, with gross profit rising to $45.8 million in 2003 from $43.8 million in 2002. Shipments rose 12% and utilization set a new record, improving from 75.8% in 2002 to 79.2% in 2003. Utilization is expected to remain high in 2004, along with a 6% to 8% increase in volumes. "Income from operations for Stolt-Nielsen Transportation Group's terminal division was $7.3 million in 2003 compared with $18.9 million in 2002. The 2003 results included an impairment charge of $10.4 million on the anticipated sale of Stolt-Nielsen Transportation Group's interest in Dovechem terminals. A sale of this interest was negotiated in November and completed in December of 2003. Adjusting for this loss, the results were broadly similar, with high utilization at all owned terminals. Increased income from operations at the wholly owned terminals was offset by reduced profits in the Asian joint-ventures. We added new capacity in Houston, Braithwaite, and Santos and have begun to develop plans for the phase III expansion at Braithwaite, for which we have strong leads for several potential customers." Stolt-Offshore (SOSA) "Consistent with expectations, Stolt-Offshore reported a net loss, before minority interest, for the full year of $416.4 million, compared with a net loss of $151.9 million in 2002," Mr. Stolt-Nielsen added. "Operationally, the focus for Stolt-Offshore this year has been the completion or near completion of several major loss-making legacy contracts and the implementation of new project tendering and management disciplines to prevent such problems from reoccurring in the future. "The year ended on an upbeat note when Stolt-Offshore was awarded a $280 million contract for the installation of the first half of the Ormen Lange pipeline, to be the largest in the world on completion. The contract includes an option in 2006 for the remainder of the installation. In the first quarter of 2004, Stolt-Offshore was awarded the largest deepwater contract in its history from BP and Sonangol. The Greater Plutonio contract, for offshore work in Angola, was valued at $730 million, with $550 million representing Stolt-Offshore's share. Stolt-Offshore's backlog now stands at $849 million, of which $556 million is for fiscal 2004." Stolt Sea Farm (SSF) "For the full year, SSF reported a loss from operations of $63.6 million, compared with the loss from operations of $20.0 million reported in 2002. SSF took provisions in the fourth quarter of 2003 to reflect the impairment of certain tangible and intangible assets. We have made further provisions against inventories in several of our businesses around the world, especially in Japan where the markets for several of the species we sell have been soft and are showing few signs of improvement. We also had a loss in Japan due to fraud. We are addressing this situation by a number of actions including putting in place a new management team and improving controls," Mr. Stolt-Nielsen said. "Our reorganized sales and marketing function in the Americas and Europe continues to develop and improve its profitability. Salmon pricing in Europe in the fourth quarter showed signs of greater strength than earlier in the year, with prices up 20% on average over the previous quarter. Salmon prices in North America remain at acceptable levels. "In Asia, we expect to regain profitability in Japan after last year's setback. "Our turbot operations in Iberia continued to post solid results, and we are looking forward to the commissioning of our new turbot facility in Vilano, Spain in the first half of 2004." Outlook "Looking ahead, we are confident about the prospects for growth in earnings at Stolt-Nielsen Transportation Group, driven by improving global economic conditions, robust trade to China, the rebounding chemical industry, and a relatively small order book for new buildings. The outlook for SSF also looks good, as the long-anticipated recovery of salmon prices in Europe finally appears to have arrived. At Stolt-Offshore, the business has been focused and streamlined. The key going forward will be turning contracts into profits. We expect the financial recovery to fully manifest itself in 2005," Mr. Stolt-Nielsen concluded. =========== R U S S I A =========== IMPULS: Court Sets Bankruptcy Hearing May 25 -------------------------------------------- Volgogradsky engineering plant, IMPULS, is currently under bankruptcy surveillance. Hearing of the company's case and report of the temporary manager, Y. Podgornov, will be on May 25, 2004. Creditors have until March 14 to file their claims with the company or its liquidator at 400075, Volgograd, Krasnopolyanskaya, 72. CONTACT: IMPULS Volgograd, Krasnopolyanskaya, 72 LESOKOMBINAT: Enters Bankruptcy Proceedings ------------------------------------------- The Arbitration Court in Novgorod region declared Pestovsky Lesokombinat bankrupt. Consequently, an enterprise bankruptcy proceeding in order to satisfy creditors' demands has been opened. Creditors' claims are accepted until April 17, 2004. Anatoly Bokhan, a member of NP SROBM of the North-west (Saint Petersburg), is the company's bankruptcy manager. MAGNITOGORSKTRANSSTROY: Court to Assess Financial Health April -------------------------------------------------------------- The Arbitration Court in Chelyabinsk region commenced bankruptcy surveillance procedure on Magnitogorsktransstroy in January. D. Starikov, a member of SRO Association of anticrisis managers, is currently monitoring the progress of the company as temporary insolvency manager. On April 6, 2004, the court will analyze the results of the surveillance currently being conducted. Creditors of the company may file claims with the company or its insolvency manager at: 455039, Chelyabinsk region, Magnitogorsk, Moskovskaya, 22. MERIDIAN: Under Bankruptcy Surveillance Procedure ------------------------------------------------- Meridian, one of Russia's largest fish-processing plants, is currently under bankruptcy surveillance procedure. Meridian said the Arbitration Court of Moscow ordered this procedure during a hearing last month. A. Amalyakin, a member of NP Interregional Self-regulating Organization of managers Bajkalskaya Liga, is acting as temporary insolvency manager. The court appointed him to the post February 2. The Arbitration Court will analyze the results of the surveillance June 15. A complete list of creditors is expected by March 15. NOVOSIBIRSK AVIA: Court Appoints Insolvency Manager --------------------------------------------------- K. Khmelevsky, head of the Novosibirsk branch of non-commercial partnership Moscow Self-regulating Organization of Professional Bankruptcy Manager, was appointed temporary insolvency manager of Novosibirsk Avia. Novosibirsk Avia filed its bankruptcy petition in the summer of 2003. In January, the Arbitration Court of the Novosibirsk region introduced surveillance procedure on the airline. It declared the company bankrupt February 2, 2004. FSUE Novosibirsk airline has more than 40 aircrafts (airplanes An-2: 13 units, An-24: 11 units, An-30: 11 units; helicopters: MI-8T: 5 units, MI-2: 3 units). It booked a profit of RUB190.3 millions in 2003; expenses were RUB199.7 millions. Accounts receivable in 2003 amounted to RUB70.8 millions, while accounts payable amounted to RUB141.5 millions. Corporation Energoprom, which owns a controlling stake in aircraft company, Aerobratsk, is seen as a potential investor in Novosibirsk Avia. OBNEFTEGAZSTROYMONTAZH: Bankruptcy Surveillance Ongoing ------------------------------------------------------- The Arbitration Court of First Instance in Hanty-Mansijsk will hear the bankruptcy case lodged against Obneftegazstroymontazh on March 1, 2004. The company has been under bankruptcy surveillance procedure since November 10, 2003. Its temporary insolvency manager is A. Shtylik. The court hearing in March will be held at 10:00 a.m. at Hanty-Mansijsk, Lenina str., 54/1. Creditors have until March 14 to file their claims. CONTACT: 628186, Tumen region, Nyagan 30 let Pobedy str., 2a * Fitch: Earnings of Russian Banks Remain Vulnerable ---------------------------------------------------- Fitch Ratings expects several of the larger Russian banks to have performed well in 2003, despite suffering margin pressure, but warns that Russian banks' earnings remain vulnerable, according to a special report published Thursday. In the report, titled "Russian Banks: Some optimism, but still vulnerable," Fitch notes that Russian banks, including those likely to report decent results for 2003, still face very considerable risks from their concentrated balance sheets and, in several cases, reliance on potentially volatile securities trading gains. With the high, often excessive, concentrations, even a small number of non-performing loans could have a very material impact both on net interest revenue and on loan loss provisions, potentially even wiping out earnings for some. The extent of the concern varies and, in general, concentration levels have been improving, but they remain a major negative ratings factor for all Russian banks rated by Fitch. Several banks are beginning now to develop their retail operations more actively and this may help reduce concentration levels looking forward. Many banks posted strong securities-trading gains in H103 on the back of the buoyant Russian securities markets but, in the case of a handful of banks, securities trading gains were all that was supporting positive real earnings. Fitch views this revenue stream as being very volatile and the weaker markets in H203 mean that securities trading gains are likely to have been significantly lower than in H103. Several banks that earned good securities-trading gains in H103 suffered securities trading losses in Q303, underlining the volatility of this income stream. Fitch says some of the smaller players may have struggled in 2003, possibly even being unprofitable in real terms and comments that their Individual ratings are very unlikely to improve beyond the 'D' or 'D/E' level. The Long-term ratings of some small banks may have scope for positive rating actions, given the improving economic climate and dependent on developments made in terms of risk management and business diversification, but their small size and franchises mean they are likely to remain in the low single 'B' ratings category. The larger banks, however, are better placed to report solid 2004 earnings, which may have positive implications for their Long-term ratings, particularly if balance sheet concentration and revenue diversification issues also continue to be addressed. Nevertheless, the agency warns that privately owned Russian banks' Long-term ratings are, for the most part, likely to continue to lag that of the Russian sovereign (BB+) by quite some way. Fitch believes that under-performance by smaller Russian banks may accelerate much-needed consolidation within the Russian banking sector; it also expects a number of Moscow-based banks to complete regional acquisitions in the medium term. Fitch currently rates 29 banks and financial institutions in Russia (for the full list see http://www.fitchratings.comor contact the Ratings Desk on +44 20 7417 6300). CONTACT: FITCH RATINGS Contacts: James Longsdon London Phone: +44 20 7417 4309 Alexander Giles, London Phone: +44 20 7417 6330 Natasha Page, Moscow Phone: +7 095 956 9901 =========== S W E D E N =========== SKANDIA INSURANCE: Expects Stock Market Changes to be Positive -------------------------------------------------------------- Skandia's result is affected by external factors such as changes in the stock market and interest rates. Future revenues, which are based on fund values, increase or decrease as a result of these factors. According to information presented in conjunction with the interim report for the third quarter of 2003, a 1% increase in the stock market would have a one-time effect on the operating result of +SEK60 million and a 1% decrease would have a one-time effect on the operating result of -SEK57 million. Through the third quarter of 2003, financial effects were positive in the amount of SEK384 million. Financial effects for the fourth quarter are expected to be positive and are estimated to be in the range of SEK600 million to SEK700 million. Comparison figures To facilitate comparison, the group overview presented in connection with the 2003 Year-End Report (as in the 2002 Annual Report) will be presented exclusive of the result of discontinued operations. This format is shown in the appended tables on pages 2 and 3. By discontinued operations is meant American Skandia, the banking operation in Switzerland, and Skandia Japan. On 11 February it was announced that Sampo has made a bid for the shares in If P&C Insurance. In accordance with the applicable accounting rules, as a result of this the holding in If will be revalued by SEK1.5 billion during the fourth quarter of 2003. This revaluation will be included in investment income and thus also in the result of operations. However, the result of the sale of the Japanese operation, which was completed on February 2, 2003, will be reported during the first quarter of 2004. Skandia's year-end report for 2003 will be released on February 27, 2004. The view full press release including tables: http://bankrupt.com/misc/Skandia_FinancialEffects.pdf CONTACT: SKANDIA INSURANCE Corporate Communications S-103 50 Stockholm, Sweden Phone: +46-8-788 10 00 Fax: +46-8-788 23 80 Web site: http://www.skandia.com Harry Vos, Head of Investor Relations Phone: +46-8-788 3643 ===================== S W I T Z E R L A N D ===================== ABB LTD.: Reports US$767 Million Full-year Net Loss --------------------------------------------------- ABB's core divisions, Power Technologies and Automation Technologies, improved their performance in the fourth quarter of 2003 and the full year, delivering significantly higher earnings before interest and taxes (EBIT) and cash flow. Mainly non-cash losses from discontinued operations - primarily in the downstream oil and gas business and on the announced sale of the reinsurance business -- were the biggest factors in a net loss of $387 million for the fourth quarter. The net loss for the full year was $767 million. "The core divisions turned in another strong performance in mixed markets," said Jurgen Dormann, ABB chairman and CEO. "They almost doubled EBIT in the quarter as cost reductions continued to pay off, and lifted operating cash flow by more than a third. For the full year, the core divisions generated almost $1.5 billion in cash. Those are significant achievements." Orders in the core divisions rose strongly in the fourth quarter on continued double-digit growth in Asia, even excluding positive foreign exchange effects of more than ten percentage points. Adjusted for foreign exchange effects, total core division revenues for the quarter were flat. "Our strengthened capital base gives us the platform we need to execute our strategy of profitable growth with more competitive costs," Dormann said. "Driving operational improvements further and finalizing the divestment program will remain our priorities in 2004." Q4 and full-year 2003 highlights Orders: The core divisions reported a solid increase in orders in the fourth quarter in both nominal U.S. dollar terms and in local currencies. Orders in local currencies were up 12% in the Power Technologies division and were 8% higher in Automation Technologies. The improvement was driven mainly by an increase in large orders (larger than $15 million) and continued strong growth in Asia. Full-year orders were 4 percent higher in local currencies for the Power Technologies division and up 2% for Automation Technologies. Group orders were up 9% in the quarter compared to the same period last year (down 5% in local currencies), and up 8% for the year (down 5% in local currencies). Excluding the Building Systems businesses, which the company is divesting, group orders for the quarter grew 6% in local currencies in the fourth quarter and were flat for the full year compared to 2002. EBIT: The core divisions almost doubled their combined EBIT in the quarter, to $395 million from $200 million in the year- earlier period. This was primarily the result of ongoing operational improvements, as well as growth in the higher-margin service business. Core division EBIT for the full year was up 41% to $1,336 million. Group EBIT for 2003 was $656 million, a 90% improvement over 2002. Cost reduction: ABB's Step change program produced savings of $235 million in the fourth quarter of 2003 and $655 million for the full year, both ahead of target. Cash flow: The two core divisions generated a combined cash flow from operations in the fourth quarter of $969 million, up 34% from the same period in 2002. For the full year, the core divisions increased cash flow from operations to $1,464 million from $859 million in 2002. Net cash used in operations for the group was $161 million for 2003 compared to cash provided by operations of $19 million for 2002. R&D and order-related development: ABB invested $613 million in R&D and $317 million in order-related development for a total of $930 million in 2003, representing about 5% of revenues compared to a total of $795 million in 2002, or 4.5% of revenues. Capital structure: ABB strengthened its capital structure in the fourth quarter of 2003 with a CHF3.1 billion (approximately 2.5 billion) rights issue, a EUR650 million straight bond, and a $1 billion unsecured bank facility which remains undrawn. The company also repaid and cancelled its previous $1.5 billion secured bank facility. Shareholders' equity increased to $3,026 million at the end of the year from $1,019 million at the end of September 2003. 2003 targets Both core divisions surpassed their EBIT margin targets. The Power Technologies (PT) division reported an EBIT margin of 7.3% (target: 7.0%) while the Automation Technologies (AT) division reported a margin of 7.8% (target: 7.1%). The EBIT margin target for the ABB Group was 4% for 2003, excluding the impact from major acquisitions and divestments. Including that impact, ABB achieved an EBIT margin in 2003 of 3.7%. The shortfall was mainly the result of additional restructuring charges taken to prepare businesses in Non-core activities for disposal. For revenues, the PT division reported flat growth in local currencies (target: 3%) for 2003. On a comparable scope of business (including a number of divestitures and business closures), the PT division increased 2003 revenues in local currencies by 3%. The AT division increased revenues in local currencies by 3% (target: 2%) for the full year. Excluding the EUR650 million raised through a bond launched in November (not included in the target), ABB achieved the debt target it set in October of $7.3 billion. Gearing (defined as total debt divided by total debt plus equity) amounted to 70% at the end of 2003, also on target. To see full financial report: http://bankrupt.com/misc/ABB_2003.pdf CONTACT: ABB LTD. Affolternstrasse 54 CH-8050 Zurich, Switzerland Media Relations Thomas Schmidt Wolfram Eberhardt Phone: +41 43 317 6492 or +41 43 317 6512 Fax: +41 43 317 7958 Investor Relations Switzerland: Phone: +41 43 317 3804 Sweden: Phone: +46 21 325 719 U.S.A: Phone: +1 230 750 7743 ZURICH FINANCIAL: Stops Losing Streak with US$2.1 Bln Net Income ---------------------------------------------------------------- Zurich Financial Services released its 2003 financial report recently. These are the highlights: (a) Net income of $2.1 billion after loss of $3.4 billion in 2002, generating an IAS return on equity (ROE) of 12.5%. (b) Business operating profit (BOP) of $2.3 billion, up 93% from 2002; BOP ROE after tax nearly doubled from 5.1% to 9.3%. (c) Premiums in General Insurance of $36.3 billion, up 22% from 2002; combined ratio at 97.9%, an improvement of 5.6 percentage points before 2002 special provisions. (d) Premiums and insurance deposits in Life Insurance of $20.6 billion, up 5% from 2002, and new business profit margin improved by 2.9 percentage points to 9.0%. (e) Net income at Farmers Management Services of $604 million, up 7% from 2002; BOP of $970 million, up 6% from 2002. (f) Investment income of $7.0 billion; return on invested assets of 4.9%, compared with 2.3% in 2002. (g) Net reserves for losses and loss adjustment expenses of $37.0 billion at the end of 2003, an increase of $6.6 billion, of which $1.9 billion for prior-year development and strengthening. (h) Total shareholders' equity of $19.4 billion, up from $16.8 billion. (i) Proposed payment of CHF2.50 per share in form of a reduction of the nominal value from CHF9.00 to CHF6.50 per share. Earnings per share (diluted) of CHF19.90. In 2003 Zurich Financial Services (Zurich) gained momentum with a net income of $2.1 billion after a loss of $3.4 billion (including special provisions of $3.5 billion after tax) in 2002. Business operating profit (BOP), Zurich's internal measurement of performance, increased by 93% to $2.3 billion, generating an operating return on equity (ROE) after tax of 9.3%. All core businesses contributed to the stronger bottom line performance. The result reflects performance against the plan announced in September 2002. Zurich set out to rebuild its earnings capacity, to strengthen the balance sheet, and to improve its credibility in the financial markets. More than 200 specific, measurable projects improved 2003 earnings by more than $1 billion, exceeding the target under the operational improvement program. Measures to reduce costs included a reduction of the work force by more than 4,500 employees (excluding divestments). Performance highlights General Insurance (formerly Non-Life Insurance) earned a net income of $1.8 billion, an increase of 326% on pre-provision 2002 net income. Premiums rose to 436.3 billion, an increase of 22% or 13% in local currencies. The combined ratio before 2002 provisions improved by a full 5.6 percentage points to 97.9%, benefiting from better claims handling, improved underwriting and more disciplined pricing against a backdrop of generally firm rates in the company's key markets. Segment business operating profit rose by $1.8 billion to $2.1 billion. Life Insurance net income climbed by 132% to $799 million (excluding net gain on divestments) on premiums, policy fees and insurance deposits of $20.6 billion, an increase of 5%. The change in business mix, along with tight cost and expense control and product re-pricing, contributed to a sizeable increase in the new business margin from 6.1% to 9.0%, while the embedded value operating return on equity rose from 9.0% to 10.5%. Farmers Management Services earned a net income of $604 million, an increase of 7% before 2002 special provisions. This increase was the result of higher premiums at the Farmers P&C Group Companies (which Zurich manages but does not own) attributable to higher rates in most lines of business. Business operating profit rose by 6% to $970 million. The Other Businesses segment was affected by a deterioration in the insurance and credit enhancement businesses of Centre, which required substantial provisions and asset write-downs. They amounted to $1.1 billion before tax and were substantially charged in the first nine months of 2003. Other achievements in 2003 include: (a) Restored operational and financial discipline. To ensure long-term earnings sustainability Zurich implemented a Group-wide approach to capital management, reinsurance, financial controlling and planning, IT, audit, and communications. (b) Sharpened focus on core businesses and key markets. In 2003, Zurich optimized its business portfolio. The Group divested businesses for net cash proceeds of more than $1.3 billion and net gains of $351 million, releasing more than $1 billion dollars in risk-based capital that Zurich is now channeling into business opportunities expected to meet the Group's earnings goals. While fine-tuning of the business portfolio is an ongoing process, most of the divestments have been made and successfully implemented, and the Group's structure now better supports its performance goals. (c) Increased capital base and strengthened balance sheet. The target of strengthening Zurich's risk-based capital by $5 billion was exceeded through a combination of measures. In addition to the $2.5 billion raised in the 2002 rights issue, the measures included among others more than $1 billion of risk-based capital released by divestments and $1.3 billion from a subordinated debt issue. High demand from investors enabled Zurich to increase the size of the debt offering. The Group used the proceeds to repay higher cost debt, reducing the average cost of funding. The Group further strengthened its reserves for prior year development, Centre, asbestos and discontinued portfolios by $1.9 billion. In addition, it reduced the proportion of equity securities in the investment portfolio for which we bear investment risk from 8.3% at the end of 2002 to 6.4%, making the balance sheet less volatile and freeing up capital that can be applied to write profitable insurance business. Primarily driven by net income shareholders' equity increased to $19.4 billion at December 31, 2003, from $16.8 billion at the end of 2002. The Board of Directors will propose to the shareholders at the Annual General Meeting, to be held on April 16, a payment of CHF2.50 per registered share in form of a reduction of the nominal value. =========================== U N I T E D K I N G D O M =========================== BRITISH ENERGY: To Discuss Third Quarter Results February 26 ------------------------------------------------------------ British Energy plc will be releasing its financial results for the third quarter ended December 31, 2003 on Thursday, February 26, 2004 at 12:30 noon U.K. time (7:30 a.m. Eastern Standard Time). There will be a Conference Call for Investors and Bondholders at 4:00 p.m. U.K. time (11:00 p.m. Eastern Standard Time). Dial-in details will be published on February 26, 2004. CONTACTS: BRITISH ENERGY FINANCIAL DYNAMICS, MEDIA Andrew Dowler Phone: 020 7831 3113 INVESTOR RELATIONS Paul Heward Phone: 01355 262 201 Web site: http://www.british-energy.com BROW TOP: Appoints P&A Partnership Administrator ------------------------------------------------ Name of Company: Brow Top Holdings Limited Nature of Business: Holding Company Trade Classification: 7415 Date of Appointment: February 4, 2004 Joint Administrative Receiver: THE P&A PARTNERSHIP 93 Queen Street, Sheffield S1 1WF Receivers: Philip Andrew Revill Brian Stanley Creber (IP Nos 6421, 1062) EQUITABLE LIFE: Sells Covent Garden Property for GBP80 Million -------------------------------------------------------------- Equitable Life is selling 34,000 sq. ft of retail portfolio to Anglo Irish Bank and Clarendon Properties for about GBP80 million, according to The Telegraph. The property is next to the Royal Opera House in Covent Garden. It fronts James Street and Russell Street and comprises houses and 16 shops including Gap, Disney Stores and Boots. The sale is a loss of opportunity to develop the site on the part of Insight Investment, the asset management company handling the sale of Equitable's property portfolio. The troubled mutual has been selling assets for the past two years, converting them into bonds to meet its liabilities and protect its solvency margins. FLORIZEL LIMITED: Names Tenon Recovery Administrator ---------------------------------------------------- Name of Company: Florizel Limited Reg. No: 02635471 Trading Name: Skillbeech Logistics Nature of Business: Warehousing and Distribution Trade Classification: 6024 Date of Appointment of Joint Administrative Receivers: February 11, 2004 Name of Person Appointing the Joint Administrative Receivers: GMAC Commercial Finance plc Joint Administrative Receivers: TENON RECOVERY 73 Baker Street, London W1U 6RD Receivers: S R Thomas S J Parker (Office Holder Nos 8920, 8989) Company Address: PO Box 138 Stevenage SG2 8YN Phone: (01462) 436 156 Fax: (01462) 457 402 J D CRANE: In Administrative Receivership ----------------------------------------- Name of Company: J D Crane Group Limited Reg No 04506823 Previous Name of Company: JDC001G Nature of Business: Crane Hire Trade Classification: 7134 Date of Appointment of Joint Administrative Receivers: February 9, 2004 Name of Person Appointing the Joint Administrative Receivers: Royal Bank of Scotland Commercial Services Ltd. Joint Administrative Receivers: DELOITTE & TOUCHE LLP Lomond House, 9 George Square, Glasgow G2 1QQ Receivers: John Charles Reid James Bernard Stephen (Office Holder Nos 0085596, 009273) Company Address: 107 Urquhart Road Aberdeen 5NH Phone: (01224) 640555 Fax: (01224) 626414 KINGFISHER LEISURE: Ernst & Young Appointed Administrator --------------------------------------------------------- Name of Company: Kingfisher Leisure Limited Reg. No: 02714166 Nature of Business: 5540-Bars Trade Classification: 48-Licensed Premises Administration Order made: February 9, 2004 Administrator: ERNST & YOUNG LLP One Colmore Row, Birmingham B3 2DB I Best Joint Administrators: I. Best A. Lovett S. Allport (Office Holder Nos 8631, 6476, 8763) LAKELAND BEEF: Names P&A Partnership Administrator -------------------------------------------------- Name of Company: Lakeland Beef Limited Nature of Business: Non-Trading Company. Lakeland Beef is a new beef marketing initiative that uses H&H's facilities at Borderway. Trade Classification: 7499 Home Page: http://www.lakelandbeef.com Date of Appointment: February 4, 2004 Joint Administrative Receiver: THE P&A PARTNERSHIP 93 Queen Street, Sheffield S1 1WF Receivers: Philip Andrew Revill Brian Stanley Creber (IP Nos 6421, 1062) MAYFLOWER CORPORATION: Issues Surprise Profit Warning ----------------------------------------------------- The recent profit warning of Mayflower Corporation is attracting investigation from the Financial Services Authority, according to The Evening Standard. The bus maker has said it is likely to report significant losses this year. This is contrary to its pronouncements a few months ago when it boasted of potential profits of more than GBP22 million. Profits before exceptional items may come at GBP6 million. The bottom line is likely to be far worse as the company warned of "significant exceptional charges," the report said. Instead of reporting this week, Mayflower will issue its annual results a month later. This was after operational and accounting issues emerged as a result of the end of year audit of PricewaterhouseCoopers. It was also revealed that the company hired Alan Jamieson, a former head of business recovery at PricewaterhouseCoopers, as the group's "restructuring officer" to help it find a way to solve problems with a new GBP160 million debt facility signed at Christmas. CONTACT: THE MAYFLOWER CORPORATION John Simpson Phone: 01494 450145 David Donnelly Phone: 01494 450145 GAVIN ANDERSON & COMPANY Liz Morley Phone: 020 7554 1400 PRICEWATERHOUSECOOPERS Alan Jamieson Phone: +44 (0) 207 804 3000 MORGAN CRUCIBLE: Shakeup Bears Fruit; Operating Profit Up --------------------------------------------------------- Preliminary Results for the year to January 4, 2004 2003 2002 ----- ----- Group Turnover GBPm 849.6 880.3 Operating Profit* GBPm 42.6 34.1 Underlying PBT** GBPm 26.9 21.3 Net Debt GBPm 249.3 251.6 Underlying EPS*** pence 9.6p 5.0p * Defined as statutory operating loss of GBP32.2 million (2002: loss GBP30.9 million) before goodwill amortization of GBP7.5 million (2002: GBP7.7 million) and operating exceptional charges of GBP67.3 million (2002: GBP57.3 million). This measure of earnings is shown because the Directors consider that it gives a better indication of underlying performance. ** Defined as statutory loss before tax of 78.0 million (2002: loss GBP58.7 million) before goodwill amortization of GBP7.5 million (2002: GBP7.7 million) and corporate and operating exceptional charges of GBP97.4 million (2002: GBP72.3 million). *** Basic underlying loss per share of 30.5p (2002: 23.2p) loss adjusted to exclude the after tax impact of corporate and operating exceptional items of 40.1p (2002: 28.2p). (a) Total turnover GBP849.6 million (2002: GBP880.3 million), equivalent to GBP844.8 million at constant exchange rates (b) Operating profit from continuing operations before goodwill amortization and operating exceptional charges up 38.8% to GBP41.5 million (2002: GBP29.9 million) (c) Underlying EPS before goodwill amortization and operating exceptional charges of 9.6 pence (2002: 5.0 pence) (d) Net debt reduced to GBP249.3 million (2002: GBP251.6 million) (e) First half working capital outflow reversed, resulting in net inflow of GBP1.2 million (f) Operating exceptional costs of GBP67.3 million in the year- GBP60.8 million arising from restructuring initiatives and GBP6.5 million from anti-trust and other legal costs (g) Restructuring program announced in February 2002 on track and nearing completion (h) Restructuring initiatives from the strategic review as outlined in September 2003 made good progress in the second half of the year at a cost of approximately GBP21 million (i) GBP54 million Rights Issue announced separately to fund a profit improvement program aimed at cost savings and profit improvement opportunities of up to GBP50 million per annum by end of 2006. Commenting on the results, Chief Executive Officer, Warren Knowlton said: "On Thursday an improved underlying results reflect the significant positive impact that our restructuring initiatives are already having on Group performance. While our markets overall have stabilized, the timing of a recovery remains uncertain. We are therefore not relying on a market upturn to improve future trading performance but instead are vigorously implementing our program of cost reduction and profit improvement to drive future profitability and cash flow generation. As a result, the Board is confident in the Group's financial and trading prospects for the current financial year." CONTACT: MORGAN CRUCIBLE Warren Knowlton Chief Executive Officer Phone: 01753 837 302 Nigel Young Finance Director Phone: 01753 837 306 Rupert Younger Charlotte Hepburne-Scott Finsbury Phone: 020 7251 3801 MORGAN CRUCIBLE: Unveils GBP54 Million Rights Issuance Plan ----------------------------------------------------------- Morgan Crucible launched recently a GBP54 million Rights Issue to fund a profit improvement program aimed at cost savings and profit improvement opportunities of up to GBP50 million per annum by the end of 2006. The Rights Issue (a) 1 for 4 rights issue to raise approximately GBP54 million (net of expenses) (b) Issue price of 100 pence per share represents a discount of 24.8% to closing price on February 18, 2004. (c) Fully underwritten by Cazenove & Co. Ltd Background to and Reasons for the Rights Issue (a) Profit improvement plan announced September 2003 and initial projects commenced second half 2003 (b) Rights Issue to enable Morgan Crucible to achieve target cost savings and profit improvement opportunities of up to GBP50 million per annum by the end of 2006, at the top end of previously announced target range (c) Estimated future cash cost of securing these improvements is up to GBP70 million (d) Certainty of financing for profit improvement plan, reflecting a desire not to become reliant on the timing of the Group's disposal program and a preference not to increase debt levels. Commenting, Warren Knowlton, Chief Executive Officer, said: "We are already making good progress with the profit improvement plan that I outlined in September 2003. The rights issue announced is to enable Morgan Crucible to deliver benefits at the top end of our previously announced target, at a pace that both minimizes disruption to the business and breaks the cycle of permanent restructuring within the company. I look forward to implementing initiatives to improve significantly the Group's performance and position Morgan Crucible to pursue selective growth opportunities in our core businesses, delivering long-term value to our shareholders." CONTACT: THE MORGAN CRUCIBLE COMPANY PLC Lars Kylberg, Chairman Warren Knowlton, Chief Executive Officer Nigel Young, Finance Director Phone: 01753 837 000 CAZENOVE & CO. LTD Julian Cazalet Robert Constant Shona Graham Phone: 020 7588 2828 FINSBURY GROUP Rupert Younger Charlotte Hepburne-Scott Phone: 020 7251 3801 MSM VEHICLES: Creditors Meeting Set February 27 ----------------------------------------------- Notice is given to the Creditors of MSM Vehicles Limited for a meeting on February 27, 2004 at 3:00 p.m. It will be held at the offices of Grant Thornton, 1st Floor, Royal Liver Building, Liverpool L3 1PS. Creditors who want to vote must submit details of their claim at the Grant Thornton office no later than February 26, 2004 at 12:00 noon. L Ross, Joint Administrative Receiver Company address: The Garage Holyhead Road Shrewsbury, Shropshire SY4 1AY Phone: 01743741399 PARAMOUNT EXPRESS: Creditors to Meet March 18 --------------------------------------------- A Meeting of the Members of the Paramount Express Limited Company will be held at 47-49 Green Lane, Northwood, Middlesex HA6 3AE, on March 18, 2004, at 2:00 p.m., to be followed at 2:15 p.m. by a General Meeting of the Creditors, for the purpose of having laid before them an account of the Liquidator's acts and dealings and of the conduct of the winding-up during the year ended February 6, 2004 and hearing any explanations that may be given by the Liquidator. A K Bhardwaj, Liquidator REAPE BROS: Annual Meeting Scheduled March 17 --------------------------------------------- Notice is hereby given that a General Meeting of the Members of Reape Bros. Contractors Limited will be held at Monahans, 38-42 Newport Street, Swindon SN1 3DR, on March 17, 2004, at 10:30 a.m., to be followed at 10:45 a.m. on the same day by a Meeting of the Creditors of the Company. The Meetings are for the purpose of enabling the Liquidator to present an account showing the manner in which the winding-up of the Company has been conducted in the preceding year and to give any explanation that he may consider necessary. P M McConnell, Liquidator Company Address: 1 Station Road Swindon, Wiltshire SN1 2BD Phone: 01793497030 SCOTTISH WIDOWS: Enters Liquidation ----------------------------------- The Directors of Scottish Widows Stock Market Growth 2 plc (the Fund) wish to announce the Fund has been liquidated. The Directors have therefore applied to the Irish Stock Exchange to delist the Shares of the Fund. Application has been made for the Shares of the Fund to be removed from the Official List of the Irish Stock Exchange and the Irish Stock Exchange has agreed that the Shares be delisted with effect from February 23, 2004. CONTACT: HSBC FUND ADMINISTRATION (IRELAND) LIMITED Tony Hallside Phone: + 353 1 613 8312 J & E Davy Aoife Colgan Phone: +353 1 614 8933 STEELCRAFT HOLDINGS: Winding Up Resolution Passed ------------------------------------------------- At an Extraordinary General Meeting of the Steelcraft Holdings Limited on January 28, 2004 at 1-2 Little King Street, Bristol BS1 4HW the subjoined Resolutions to wind up the company has been passed. Colin Prescott of Moore Stephens, 1-2 Little King Street, Bristol BS1 4HW, is appointed Liquidator for the company. CONTACT: MOORE STEPHENS 1-2 Little King Street, Bristol BS1 4HW Contact: Colin Prescott, Liquidator London Nicholas Hilton St. Paul's House, Warwick Lane London, EC4P 4BN Phone: 020 7334 9191 Web site: http://www.moorestephens.co.uk Company Address: Unit 16/17 Stephenson Close Andover Phone: 01264356205 TELEWEST COMMUNICATIONS: Appoints Acting Chief Executive Officer ---------------------------------------------------------------- Telewest Communications plc announces that Charles Burdick has resigned as group managing director of Telewest and as a director of the company and that Barry R. Elson is appointed acting chief executive officer. These changes take immediate effect and Charles Burdick will be available as a consultant to the company until the end of the financial restructuring. Barry Elson has also been appointed as acting chief executive officer and a member of the board of directors of Telewest Global, Inc., which will become the new holding company for the businesses that currently constitute Telewest Communications following the company's planned financial restructuring. Cob Stenham, chairman of Telewest Communications, will be appointed chairman of the board of directors of Telewest Global. Cob Stenham, chairman of Telewest, said: "On behalf of all of the board, we would like to thank Charles for his years of service and for leading the company to the threshold of the implementation of a financial restructuring. We are grateful for all he has done and wish him very well for the future." Charles Burdick said: "I want to thank everyone, especially the Telewest management team, for helping me lead the company through this difficult period of financial and operational restructuring. I have enjoyed my time at the company; but it is a time of change, and I am leaving to pursue other opportunities. I have no doubt that Barry will do a great job." Barry Elson commented: "Charles has created a strong platform to build on and I look forward to working with the board of directors of Telewest Communications and then of Telewest Global, with the benefit of Cob as chairman, together with the management team to build on this and realize the potential of Telewest with the advantage of a transformed capital structure." Barry R. Elson Mr. Elson has been a senior executive in the broadband- telephony-video industry for 18 years, almost 14 of those with Cox Communications, one of the leading U.S. broadband and cable companies, where he rose through a series of senior line operating positions to become Executive Vice President of Operations with a nationwide P&L responsibility. From 1997- 2000, he was also President of Conectiv Enterprises and Corporate Executive Vice President of Conectiv, a diversifying $4.2 billion energy company in the Middle Atlantic States. Most recently, he was Chief Operating Officer of Urban Media, a Silicon Valley, venture capital backed building centric CLEC start up with nationwide operations, and President of Pilot Associates, a management consulting firm specializing in the broadband-telephony-video industry for Wall Street clients. Mr. Elson has been Chairman of CTAM, the U.S. cable industry's marketing association, and on the board of CSPAN, the industry's political affairs channel. CONTACT: TELEWEST Jane Hardman Director of Corporate Communications Phone: 020 7299 5888 CITIGATE Dewe Rogerson Phone: 020 7638 9571 Anthony Carlisle Phone: 07973 611888 UGIMAG LIMITED: Appoints Tenon Recovery Liquidator -------------------------------------------------- At an Extraordinary General Meeting of the Members of the Ugimag Limited held on January 29, 2004 the subjoined Special Resolution to wind up the company was passed. The Company names Ian William Kings, Insolvency Practitioner, of Tenon Recovery, Tenon House, Ferryboat Lane, Sunderland SR5 3JN, as Liquidator. CONTACT: TENON RECOVERY Tenon House, Ferryboat Lane Sunderland SR5 3JN Contact: Ian Williams Kings, Liquidator Phone: 0191 511 5000 Fax: 0191 511 5001 E-mail: sunderland@tenongroup.com Company Address: Unit 1 The Ickles Rotherham, South Yorkshire S60 1DP Phone: 01709829783 VAN SON: Names Ernst & Young Liquidator --------------------------------------- At an Extraordinary General Meeting of the Van Son (U.K.) Limited Company on February 4, 2004 at 71 Alston Drive, Bradwell Abbey, Milton Keynes, Buckinghamshire MK13 9HG the Special Resolution to wind up the company was passed. Elizabeth Anne Bingham and Alan Lovett of Ernst & Young LLP, 1 More London Place, London SE1 2AF, are appointed Joint Liquidators for the company. CONTACT: ERNST & YOUNG LLP 1 More London Place London SE1 2AF Contact: Elizabeth Anne Bingham, Liquidator Alan Lovett, Liquidator Phone: +44 (0) 20 7951 2000 Fax: +44 (0) 20 7951 1345 Web site: http://www.ey.com VIS ENTERTAINMENT: BAM Rescues State of Emergency 2 --------------------------------------------------- California-based BAM Entertainment has agreed to purchase struggling Scottish computer games developer VIS Entertainment in an all-stock transaction, according to The Herald. The purchase price is only GBP4.5 million, the report said. Included in the deal is the acquisition of SOE Development, the company set up to fund the development of action game State of Emergency 2. BAM will publish the sequel to Vis' original hit itself. Vis' 50% interest in Vis iTV, a joint venture with Telewest will also go to BAM. BAM will issue nine million shares to effect the buyout. It will also take on Vis' approximately GBP3 million loan from SOE Development, which was financed by a group of investors led by Hamilton Portfolio. According to the report, a spokesman for BAM said Chris van der Kuyl, the Vis chief executive and founder, and Paddy Burns, chief technology officer of Vis, would join its senior management team, and that van der Kuyl and one non-executive Vis director will join the board. Vis was in crisis after talks aimed at securing the finances to publish State of Emergency 2 collapsed. Take Two, which released the original State of Emergency, did not back the sequel. Bank of Scotland and other venture capitalists opted not to invest in SOED to develop the game without a publisher on board. WEMBLEY PLC: To Post Circular on MGM MIRAGE Buyout Bid this Week ---------------------------------------------------------------- Following the announcement on January 27, 2004 of MGM MIRAGE's proposed recommended cash acquisition of Wembley, it is Wembley's intention that the documents relating to the scheme of arrangement will be posted to Wembley Shareholders in late February 2004 after the announcement of Wembley's preliminary results on February 24, 2004. Rule 30.1 of the Code normally requires offer documentation to be posted within 28 days of an offer announcement, which would mean that the documentation in respect of MGM MIRAGE's recommended cash acquisition would have to be posted on or before February 24, 2004. However, as a result of the timing of Wembley's announcement of its preliminary results, the Panel Executive, with the agreement of MGM MIRAGE, has consented to an extension of the normal timetable for posting. The Acquisition is being implemented by way of a scheme of arrangement of Wembley under section 425 of the Companies Act. The Acquisition is subject to a number of conditions, including regulatory clearances in the U.S., the sanction of the Court and the approval of Wembley Shareholders. It is hoped that regulatory clearances will be obtained by not later than June 2004 with the Acquisition being completed shortly thereafter. INQUIRIES: COLLEGE HILL Matthew Smallwood Justine Warren Phone: 020 7457 2020 YASUDA LIFE: Designates Bingham and Lovett Liquidators ------------------------------------------------------ At an Extraordinary General Meeting of the Yasuda Life International (London) Limited Company on January 30, 2004 at River Plate House, 7-11 Finsbury Circus, London EC2M 7YA the Special Resolution to wind up the Company was passed. The Company designates Elizabeth Anne Bingham and Alan Lovett of Ernst & Young LLP, 1 More London Place, London SE1 2AF as Joint Liquidators. CONTACT: ERNST & YOUNG LLP 1 More London Place London SE1 2AF Contacts: Elizabeth Anne Bingham, Liquidator Alan Lovett, Liquidator Phone: +44 (0) 20 7951 2000 Fax: +44 (0) 20 7951 1345 Web site: http://www.ey.com COMPANY ADDRESS: River Plate House 7-11 Finsbury Circus London EC2M 7YA Phone: 02072566646 YORKSHIRE GROUP: Shareholders Okay Textile Dyes Business Sale ------------------------------------------------------------- On February 3, 2004, Yorkshire announced the proposed disposal of part of the textile dyes business operated by Yorkshire Americas, the agreement of the terms of new banking facilities and a proposed extension of the borrowing powers of the Directors granted at the Company's Annual General Meeting on June 17, 2003. At the Extraordinary General Meeting of Yorkshire, which took place earlier, the Resolution put to Shareholders relating to the Proposed Disposal and extension of the borrowing powers of the Directors was duly passed. Completion of the Proposed Disposal remains subject to various conditions, which are described in the circular dispatched to Shareholders on February 3, 2004. The Proposed Banking Facilities are conditional amongst other things on Completion... The Company also confirms that Pat Barrett has formally tendered his resignation as Chairman of Yorkshire, with effect from Completion, having previously indicated in the Circular that this was his intention. Certain terms used in this announcement are defined in the Circular. CONTACT: YORKSHIRE GROUP PLC Andrew Dick (Chief Executive) Jim Perrie (Chief Financial Officer) Malcolm Shilton (Company Secretary) Phone: 0113 244 3111 HAWKPOINT PARTNERS LIMITED Andrew Speirs Phone: 020 7665 4500 HOGARTH PARTNERSHIP LIMITED Nick Denton Phone: 020 7357 9477 ********* 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 Liv Arcipe, 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. 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