European Business News (EBN), 96-10-02

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated 1810 October 2 CET

CONTENTS

[01] Netanyahu calls for another Arafat meeting

[02] Weather hinders search for possible survivors of Peruvian air-crash

[03] Eurotunnel renegotiates its debt with creditor banks

[04] KPN bids 1.5bn US dlrs for TNT

[05] Norwich Union plans stock offer

[06] Bank of Scotland reports a 24% gain in first-half pretax profit

[01] Netanyahu calls for another Arafat meeting

An Israeli official said they would meet near the White House before talks with President Clinton continue.

Talks are focusing on an Israeli troop withdrawal from Hebron. But the officials said the Palestinians were making unacceptable demands for an immediate pull-out. This morning, the West Bank town was again the scene of confrontations between Israeli soldiers and stone-throwing Palestinian youths.

[02] Weather hinders search for possible survivors of Peruvian air-crash

Rescue crews working three miles (5 km) north of Ancon, 30 miles (50 km) north of Lima, had found no bodies or survivors as dawn broke. A heavy fog shrouded the ocean, hampering their efforts.

Aeroperu Flight 603, a Boeing 757, was en route to Santiago, Chile, when it crashed near Ancon, the airline said in a statement. A Boeing 727 had carried passengers on the flight from Miami, said Raul Chiappo, the airline's operations manager for the airline. He said 20 people aboard during the crash had boarded the flight in Miami. One person had borded in New York, he said.

The plane left Lima at 12:42 a.m. and the pilot reported mechanical failure about 5 minutes later, the statement said. All contact was lost at 0110. The plane carried 61 passengers and nine crew members, the airline said, although the 757 has a 180-person capacity. Before dawn, fire officials lined up ambulances, fire trucks, gasoline-powered generators and reflectors on the dark beach so any survivors would have bright lights to swim toward.

Navy and fire department boats were searching the area, said fire chief General Juan Piperes of the Lima port of Callao. 'The only possibility for the survivors is to direct themselves toward the light,' Piperes said.

Jesus Herrera, a fisherman who lives in wooden shack 40 feet (12 metres) from shore, said he heard a rumble during the night. Ten minutes later, his shack was flooded with a surge of water.

One helicopter crew had taken off for an aerial search, but officials were holding the others back until the weather cleared. Firefighters said visibility was only 15 to 30 feet (4.5-9 metres) in some areas.

'The plane's whole system completely failed. That's what we have,' Piperes said. There was no further information on the type of mechanical failure reported by the pilot. At least one report suggested the plane could have floated for a bit on the ocean.

'They have seen the plane's lights floating on the sea,' Callao fire department dispatcher Zoraida Reyes said before dawn. But a spokesman for Peru's air police said a rescue helicopter had located what was thought to be the point of the plane's impact and had seen only oil floating on the surface of the ocean.

The spokesman, who refused to give his name, said that once the fog lifted three police helicopters would head to the crash site and drop two inflatable rafts capable of carrying 15 people each. Navy boats were searching the area.

[03] Eurotunnel renegotiates its debt with creditor banks

The French commercial-court appointed negotiators' mandate expired at midnight without having constructed a restructuring plan for its more than 8 billion British pounds in junior debt, she said. 'We have not reached an agreement,' she said. 'But negotiations are continuing.'

Eurotunnel has been negotiating to restructure the debt with its creditor banks after having suspended payment September 14. The agreement is expected to include a debt-for-equity swap that would give the 225 creditor banks a 49% stake in the company. The company suspended payment on its debt on September 14, 1995. The spokeswoman said she couldn't confirm whether or not the official negotiators had already handed in their report on the talks to the commercial court, as reported in today's Financial Times.

Sources close to the negotiations said the court-appointed mediators did turn in their report to the French commercial court yesterday. But it remains unclear when the president of the Tribunale de Paris will respond to the report. The spokeswoman also said she was unaware of how the commercial court would proceed with the mediators, whose mandate was not renewed. Possible routes include allowing negotiations to continue or beginning bankruptcy proceedings, observers have said.

In the meantime, negotiations between Eurotunnel and its creditors will continue. The company isn't expected to make a statement until it learns the court's reaction.

Eurotunnel shares remained suspended today in London, Paris and Brussels.

[04] KPN bids 1.5bn US dlrs for TNT

The Dutch postal and telecommunications monopoly is offering 2.45 a fully diluted share for the company, a 50% premium over TNT's closing price on Tuesday. The bid has been unanimously supported by TNT's board, David Mortimer, chief executive officer of TNT, said the proposal represents 'an outstanding opportunity' to create a strong transportation group.

[05] Norwich Union plans stock offer

The company would create a new holding company to be called Norwich Union PLC. The offering will be the first conversion of a British mutual life insurer into a public company. Norwich Union manages about £40 billion in funds and has gross premium income of £4.7 billion a year.

Members who qualify for the flotation will receive free shares in the new holding company and rights to subscribe for additional shares. No new members will be allowed from today, the company said.

Norwich Union Life has more than five million customers worldwide, and about three million of those are members. Most holders of existing life, pensions and annuity policies of the society are members, which includes holders of policies issued by its overseas operations.

The group earned around 28% of its 1995 gross written premiums outside Britain.

Norwich said the stock offering will allow its general insurance business to be transferred out of the life fund and put a higher value on those life insurance operations.

[06] Bank of Scotland reports a 24% gain in first-half pretax profit

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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