The company acquired a debt burden higher than that weighing down many developing countries during an acquisition spree that was only possible because its continued existence was guaranteed by the French state.
Eventually, the government paymasters tired of the company’s antics, and last September Michel Bon quit as chairman and CEO, to be replaced by turnaround specialist Thierry Breton. He has already announced job cuts of 7,500 in France this year and said that the company would only need 15bn euros ($16.2bn) to shore up its balance sheet. Breton said the 70bn euros of debt was the absolute priority. We have to deal with this problem, he said.
There were no surprises on the earnings front, with Breton predicting that earnings at the EBITDA level would be in line with market forecasts of slightly below 15bn euros ($16.2bn), while net debt at the year end would be 68bn euros ($73.3bn). Breton said the group is aiming to increase sales by between 3% and 5% in 2003, and he predicted double-digit EBITDA growth.
Shareholders also approved a rescue plan for German wireless carrier MobilCom AG, in which it owns a 28.5% stake. It will issue 4.85bn euros ($5.2bn) in convertible bonds to placate the creditor banks, while there will be a separate 1.25bn euro ($1.3bn) share issue for MobilCom’s suppliers Nokia and Ericsson.
Source: Computerwire
