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Business Roundup: Europe European Roundup May 2002 Lloyd's of London issues its first loss in its first annual results NTL announces restructuring plan Ericsson to cut one-quarter of its workforce Former Sotheby's executives sentenced Quick highlights Lloyd's of London issues its first loss in its first annual results Lloyd's of London insurers issued a pro-forma loss of £3.1 billion (US$4.5 billion) in 2001. The loss was blamed mostly on the September 11 terrorist attacks. Lloyd's broke with 300 years of tradition in reporting last year's loss—the first in its history—as its usual three-year accounting procedure allowed losses to be spread over time. "The move to annual accounting is a fundamental step in our strategy of reform. It makes us more accessible and transparent, and enables us to report results that can be compared easily to those of other insurers," said Lloyd's Chief Executive Nick Prettejohn. NTL announces restructuring plan Britain's largest cable operation, NTL, announced a restructuring of debts with US$10.6 billion out of over US$17 billion being swapped for equity. Control of the company will be given to bondholders. Operations in Britain, Ireland and Continental Europe will not be part of bankruptcy proceedings and over US$6 billion in bonds and bank loans backed by these assets will remain outstanding. Creditors, who have already lent about US$6 billion to the company, must approve the deal. Ericsson to cut one-quarter of its workforce Ericsson confirmed fears by announcing the lay off up to 20,000 of its 82,000 staff positions by the end of 2003. This announcement follows the previous year's cut of 22,000 jobs. First quarter losses for the Sweden-based mobile phone and equipment maker amounted to SKr5.4 billion (US$517 million), after orders from heavily indebted mobile operators faltered. The company is also requesting £2.1 billion from shareholders to bolster its financial position. Former Sotheby's executives sentenced In New York, Sotheby's ex-chairman, Alfred Taubman, and its former chief executive, Diana Brooks, were sentenced separately for their parts in the price fixing scandal between Sotheby's and Christie's. Taubman was sentenced to a year and a day in prison and a US$7.5 million fine for his involvement in the scheme. Brooks received three years of probation (to include six-months of house arrest), is to perform 1,000 hours of community service and is to pay a US$350,000 fine. The former chairman of Christie's, Sir Anthony Tenant, was indicted but refuses to go to the United States to stand trial. Under English law, he cannot be extradited. Quick highlights Hewlett-Packard (HP) announced that its shareholders approved its takeover of Compaq Computer Corporation by a 2.8 per cent margin, which means the deal will be completed regardless of any legal challenges over the voting. The Securities and Exchange Commission also cited HP over its relationship with Deutsche Bank, a shareholder of the company. Foreign investors started legal action against PricewaterhouseCoopers over its audit of Gazprom, a partly state-owned gas giant in Russia. The investors are alleging the firm failed to notice asset stripping, a claim that PricewaterhouseCoopers denies. Also in Russia, British oil company BP decided to ignore past experiences and is raising its stake in Sidanco, a Russian oil firm, from 10% to 25%, a move that cost the company US$375 million. Germany's biggest baker, Kamps, changed its mind over a takeover by Barilla, the world's biggest pasta maker. The move came after the Italian company increased its cash offer to just over euro 1 billion (US$892 million). In retaliation for the announced steel tariffs, the European Commission created a list of sanctioned American goods. In order to target states that are politically sensitive to president George Bush, the list includes steel products, quinces, crocheted vests, protective goggles and pinball machines. The US has asked the EU to postpone the scheduled mid-June sanction date. Sabic, a Saudi Arabian-controlled petrochemicals company, has bought the petrochemicals division belonging to DSM, a Dutch chemicals company, for euro 2.3 billion (US$2.0 billion). Sabic intends to make further acquisitions and is negotiating with Italy's Eni regarding that company's chemicals business. Fairchild Dornier, the world's third-largest short-haul jet maker, filed for bankruptcy protection in Germany. Loans underwritten by Bavaria's government have meant that German banks have agreed to provide financial assistance, a move that may provoke a reaction from the European Commission. Compiled by Mario Cacciottolo © Copyright 2001. Galt Western Personnel Ltd. Unless otherwise specified, you may reprint this article, quote from it, use it in research or projects, duplicate it or distribute it. Credit of authorship and source MUST be given to galtglobalreview.com. Ownership of Copyright remains with Galt Western Personnel Ltd.     Return to Top      Business News / Business Roundup - Australia / Canada / Europe / United States / Careers / Classified / Information Technology / New Technology / Education News / World Facts / Book Reviews / Archives/Research