Iiimarinen. Europeans are as nutty as the weirdest Americans.
Mobilcom says France Telecom obliged to finance 11.3 billion euro UMTS launch
Mobilcom AG chairman Gerhard Schmid said that as part of a shareholder agreement with France Telecom,
the French operator is obliged to help finance the launch of a UMTS network in Germany, in an interview
yesterday with French daily Liberation.
Schmid said the cost of providing UMTS services to 25% of the Germany population in 2003 will reach 11.3
billion euro. France Telecom is hoping to limit the financing needs as part of its plans to reduce its 65 billion
euro of debt.
"It's less than we were planning at the beginning," Schmid said. "The business plan provided for an investment
that was to reach, license included, more than 15 billion euro."
"France Telecom has committed to finance all of this with us in writing. This contract is in the hands of our
bankers and our suppliers. We want to make it public, but France Telecom is against the idea," Schmid said.
"No bank would have lent us the money if we had not presented a solid investment plan over several years,
with the guarantee from France Telecom," he added.
If France Telecom were to sell its 28.5% Mobilcom stake, it would still lose 10.9 billion euro, based on the
3.8 billion spent on acquiring the stake, a 400 million euro loan, a 4.7 billion euro bank loan due in August,
and 2 billion euro of credit extended by Nokia Corp and LM Ericsson AB to Mobilcom, Schmid said.
Under terms of the German UMTS license, Mobilcom must offer third-generation mobile telecom services to
25% of the German population in 2003.
"If we aren't able to launch our services and just one of our competitors does, we lose the license. It's as
simple as that, and (France Telecom chairman) Michel Bon knows the conditions as I do," Schmid said.
Schmid said Mobilcom is not looking for a German partner, particularly E-Plus, because E-Plus has its own
financial problems.
Concerning Schmid's refusal to tell France Telecom that his wife had bought a 5% Mobilcom stake until last
January, Schmid said this did not concern France Telecom. "It's not important either for me to know where
Michel Bon's wife gets her hair done," he said.
He refused to say whether he would sell his Mobilcom stake to France Telecom from 2003, adding that he
would not reveal his selling price to the press.
NNN
© AFX News
Story filed: 16:35 Sunday 3rd March 2002
ananova.com.
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MobilCom chief in confidential talks with state
By Bertrand Benoit in Frankfurt and Jo Johnson in Paris
Published: March 3 2002 19:08 | Last Updated: March 3 2002 19:14
Gerhard Schmid, chief executive of MobilCom, has been holding confidential talks with the regional
government of Schleswig-Holstein amid growing concern over the mobile operator's ability to refinance
E4.7bn ($4bn) of debt, which falls due for repayment in July.
Early last week MobilCom threatened to sue France Telecom, its business partner and second largest
shareholder, for allegedly breaching an agreement to deliver 3G mobile services in Germany.
France Telecom has undertaken to guarantee the financing of its UMTS network until operations start.
However, it has publicly rejected Mr Schmid's business plan as "unrealistic and irres ponsible" and says it
will only finance a business plan it has approved.
The government of the state of Schleswig-Holstein, where MobilCom is based, confirmed on Friday that Mr
Schmid had attended a meeting with Bernd Rohwer, its economics minister, in Kiel on Tuesday.
Neither the company nor the government would comment on the content of the talks. The government said that
it was not working on an "emergency plan" for MobilCom.
Landesbank Schleswig Holstein, the local public-sector bank, denied reports that it was considering buying
France Telecom's 28.5 per cent stake in MobilCom in the event of a break-up.
It said it would not "take over any stake in MobilCom from any shareholder". The bank, which is believed to
have a small debt exposure to the company, is understood to have ruled out any financial help.
Mr Rohwer, together with the regional finance minister and prime minister, sit on the 30-strong supervisory
board of the landesbank, which is 25 per cent owned by the state government.
However, local parliamentarians from the ruling SPD and opposition CDU parties said they would support a
rescue plan for MobilCom should France Telecom withdraw.
Klaus-Dieter Muller, local SPD spokesman for economic policy, said that the centre-left regional government
would call on chancellor Gerhard Schroder for assistance if MobilCom requested it.
Separately, it emerged that Mr Schmid was withholding payments to building contractors working on a
14-storey office development in the Germania-Harbour district of Kiel, the state capital. The E45m project is
a private investment by Mr Schmid.
Thomas Rahn, head of Richard Rahn, one of the contractors leading the project, said work had stopped on
February 22 because Mr Schmid had not honoured a payment of "several million marks" due on February 14.
A spokesman for MobilCom said Mr Schmid was "reviewing the financing of his investment" but was not
facing any personal financial difficulties.
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