New France Telecom sale to raise EUR 4 billion

6th June 2005, Comments 0 comments

PARIS, June 6 (AFP) - The French state seems likely to raise about EUR 4 billion (USD 4.92 billion) from the sale of 6.0-8.0 percent of France Telecom, stock dealers said on Monday.

PARIS, June 6 (AFP) - The French state seems likely to raise about EUR 4 billion (USD 4.92 billion) from the sale of 6.0-8.0 percent of France Telecom, stock dealers said on Monday.  

They said that the government had put shares in the company on sale at EUR 22.50 –EUR 22.85 each.  

The new government had said late on Sunday that it would sell 6.0 percent of France Telecom, rising possibly to 8.0 percent, or 152 million shares rising possibly to 198 million shares.  

The stock had closed on Friday at EUR 22.88.  

The state, which sold 10 percent of the company in September and thereby reduced its holding to less than 50 percent, will own 33.0-35.0 percent of France Telecom once the operation has been concluded.  

The previous sale was made at EUR 19.05 per share and raised EUR 5.1 billion for the state.  

The new French centre-right government, formed after French electors rejected the European Constitution a week ago, has given itself 100 days to show progress in reducing high unemployment.  

But it also faces severe constraints on public finances. And one of the main platforms of the "no" campaigners in the constitution referendum was rejection of so-called "ultraliberal" policies, a term which, in France, covers such issues as privatisation, the opening up of public services, and threats to employment, particularly in the public sector.   

Trades Unions immediately objected to the further sale of stock in France Telecom, objecting that it undermined job security and weakened the prospects for universal public service.  

Stock traders said that the sale of shares in France Telecom seemed likely to raise EUR 3.4 billion – EUR 4.5 billion.  

The company was brought to its knees three years ago after the Internet and high-tech stock bubble, from which it emerged as one of the most indebted companies in the world.  

At the time, analysts said that one reason was that the state, unwilling to provide funds for recapitalisation and unwilling to see its controlling interest diluted, had prevented the business from issuing new stock, like its competitors, to finance itself out of trouble. So the company raised debt instead.  

The current French finance minister, Thierry Breton, is the former head of France Telecom, brought in to mastermind a rescue, helped by the government.  

The finance ministry said on Monday that the state intended to remain a significant shareholder in the medium term.

 

© AFP

Subject: French News

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