France Telecom To Assume EUR7.5 Billion MobilCom Debt - Report
Friday October 18, 2:17 am ET
BERLIN -(Dow Jones)- France Telecom intends to assume about EUR7.5 billion in debt from MobilCom AG , the German telecommunications company in which it holds a 28.5% stake, the Handelsblatt newspaper reported Friday.
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France's biggest phone operator will take on a EUR4.7 billion loan for MobilCom's third-generation mobile network, EUR1 billion in shareholder loans, and EUR1.2 billion in financing agreements with Nokia and Ericsson , the newspaper said.
France Telecom will pay MobilCom EUR485 million to halt development of the 3G network, Handelsblatt added.
In return, MobilCom will agree not to seek damages from France Telecom, the newspaper said.
A memorandum of understanding will be signed within two weeks, although it's unclear whether MobilCom founder and 40% shareholder Gerhard Schmid supports the plan, Handelsblatt said.
MobilCom's future has hung in the balance since France Telecom, struggling to reduce debt, decided last month to halt financing for its German partner.
The Financial Times reported Friday that France Telecom had denied reaching a settlement with MobilCom.
The agreement negotiated by Eric Bouvier, a France Telecom representative, and MobilCom supervisory board member Dieter Vogel, didn't, and wouldn't, include a write-off of inter-company loans nor extra funding, the FT said, citing France Telecom spokesman Bruno Janet. |
