diff --git a/src/calibre/ebooks/chm/metadata.py b/src/calibre/ebooks/chm/metadata.py
index 28e307df95..62ca6b9d84 100644
--- a/src/calibre/ebooks/chm/metadata.py
+++ b/src/calibre/ebooks/chm/metadata.py
@@ -103,7 +103,8 @@ def _get_cover(soup, rdr):
                 r[0] = img['src']
         l = r.keys()
         l.sort()
-        ans = r[l[0]]
+        if l:
+            ans = r[l[0]]
     # this link comes from the internal html, which is in a subdir
     if ans is not None:
         try:
diff --git a/src/calibre/ebooks/chm/reader.py b/src/calibre/ebooks/chm/reader.py
index 412ca94d8a..edef712bb4 100644
--- a/src/calibre/ebooks/chm/reader.py
+++ b/src/calibre/ebooks/chm/reader.py
@@ -7,7 +7,7 @@ __copyright__  = '2008, Kovid Goyal <kovid at kovidgoyal.net>,' \
 import os, re
 from mimetypes import guess_type as guess_mimetype
 
-from BeautifulSoup import BeautifulSoup, NavigableString
+from calibre.ebooks.BeautifulSoup import BeautifulSoup, NavigableString
 
 from calibre.utils.chm.chm import CHMFile
 from calibre.utils.chm.chmlib import (
@@ -17,6 +17,7 @@ from calibre.utils.chm.chmlib import (
 
 from calibre.utils.config import OptionParser
 from calibre.ebooks.metadata.toc import TOC
+from calibre.ebooks.chardet import xml_to_unicode
 
 
 def match_string(s1, s2_already_lowered):
@@ -145,8 +146,9 @@ class CHMReader(CHMFile):
 
     def _reformat(self, data):
         try:
+            data = xml_to_unicode(data, strip_encoding_pats=True)[0]
             soup = BeautifulSoup(data)
-        except UnicodeEncodeError:
+        except ValueError:
             # hit some strange encoding problems...
             print "Unable to parse html for cleaning, leaving it :("
             return data
@@ -184,7 +186,7 @@ class CHMReader(CHMFile):
                 # and some don't even have a src= ?!
                 pass
         # now give back some pretty html.
-        return soup.prettify()
+        return soup.prettify('utf-8')
 
     def Contents(self):
         if self._contents is not None: