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April 1, 2004

Bull approves debt plan and reports profit

Hardware and IT services provider Bull SA is pushing ahead with its controversial recapitalization plan after reporting a return to profitability in 2003. At the same time, the Paris, France-based company announced the death of its president Pierre Bonelli (see separate story).

By CBR Staff Writer

Bull said its board had approved a plan announced last November to slash its debt with key bondholders and raise new capital using key investors including France Telecom and NEC. Under Bull’s proposal, the French government will inject 520m euros ($641m) into the vendor, allowing it to repay the controversial 450m euros ($555m) loan it received from the French state in 2002.

However, the plan requires approval from the European Commission, which has launched an investigation into Bull’s strategy. In a statement last month, the Commission said it had to ascertain whether the plan guaranteed a return to viability for Bull, did not create undue distortions of competition, and was limited to the minimum needed.

In the 12 months to December 31, 2003, Bull made a net profit of 4.1m euros ($5.1m) compared to a loss of 548m euros ($675.4m) in 2002, on revenue that fell 16.4% to 1.27bn euros ($1.57bn).

Last year, Bull refocused its hardware business around the production of high-end servers for networked infrastructures, and launched the NovaScale standard component-based enterprise server range. It said its IT services business strengthened in the government, telecom and defense sectors.

The company said it incurred financial expenses of 47.6m euros ($58.7m) during the year, of which 24.7m euros ($30.4m) related to interest expenses on its loan from the French government.

This article is based on material originally published by ComputerWire

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