Struggling Bull looks to new leader

17th May 2004, Comments 0 comments

PARIS, May 17 (AFP) - French computer services group Bull, fighting its way out of a long period of loss, decline and debt, must look for a new chairman after the man marked out to lead the slimmed-down company, Didier Pineau-Valencienne, resigned from the board Monday.

PARIS, May 17 (AFP) - French computer services group Bull, fighting its way out of a long period of loss, decline and debt, must look for a new chairman after the man marked out to lead the slimmed-down company, Didier Pineau-Valencienne, resigned from the board Monday.

The future chairman is now expected to be the executive who has been in the post on an interim basis, Gervais Pellissier who holds the titles of chairman and chief executive following the death of the previous chairman Pierre Bonelli.

Pellissier was to have given up the post of chairman to Pineau-Valencienne.But Pineau-Valencienne said in a letter released here on Monday that an assignment given him by Bonelli, who died in late March, to prepare a plan to recapitalize the company and reduce its debt, had been completed.

"All the appropriate steps to meet that goal have been taken or will be in the very near future.

"Under these conditions I consider that the mission I acceped from Pierre Bonelli ... is today accomplished and it is now up to Bull's old and new shareholders to take charge of the company, along with its management and staff."

Following the death of Bonelli, Bull announced on April 1 that Pineau-Valencienne, former head of Schneider Electric, would be named chairman in May.

The company also decided to separate the functions of chairman and chief executive, giving the latter post to Gervais Pellissier.

Pellissier was also to hold the position of chairman until the formal nomination of Pineau-Valencienne.

The economic newspaper Les Echos reported on Monday that "a serious disagreement reportedly developed recently between the former head of Schneider Electric and certain shareholders - France Telecom has been mentioned - and/or a part of the management".

Besides France Telecom, which holds a 16.9-percent stake, Bull's other shareholders are Motorola, 16.9 percent, NEC Corporation, 16.9 percent, the French state, 16.3 percent, employees, 5.9 percent, and Dai Nippon Printing, 5.3 percent.

Les Echos said the reported disagreement centered on "the strategy to adopt once the recapitalization had been definitively secured".

Pineau-Valencienne told AFP in an interview April 16 he was optimistic about the chances of winning European Union approval for its business plan.

In his letter Monday he recalled that a Bull general assembly on May 25 would launch a recapitalization drive and a convertible bond exchange offer "that will result in a major modification in Bull's shareholders".

The recapitalization scheme calls for a contribution from the state of EUR 517 million (USD 621 million) by December 31, 2004 at the earliest and the elevation of bondholders to positions of shareholder prominence.

It is this plan that is now being studied by EU competition authorities.

After six straight years of loss, Bull last month announced that it had returned to profit under a recovery plan launched by Bonelli two years ago.Bonelli, a highly regarded, Harvard University-educated computer engineer, was hired away from the French-British group Sema in December 2001 at a time when Bull was in dire financial straits.

Besides reorienting Bull away from its basic technology activities, which were steadily losing ground, to other more promising sectors, notably services, Bonelli imposed strict economy measures.

The strategy paid off last year, when Bull posted net earnings of EUR 4.1 million (USD 5.1 million) after a loss in 2002 of EUR 548 million.

Operating profit came to EUR 40.7 million, with a profit margin of 3.2 percent. The group enjoyed three straight quarters of operating earnings last year.

But Bonelli repeatedly insisted that his priority was to re-capitalize the company, which has been groaning under a debt load of EUR 582 million.

© AFP

Subject: French news

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