The placement of 3.75 million shares is being offloaded to institutional investors at a price of 45-47 euros ($50.94-$53.20), which should raise 170m euros ($192.4m) and clear MobilCom’s 117.6m euro ($133.1m) debt at a stroke. Any remaining funds will be used to expand its core business as a mobile telephony service provider, which it runs by leasing capacity from other providers.
This transaction, to be carried out by Deutsche Bank, will reduce MobilCom’s current 73% holding (or 13.65 million shares), to 52.9% of the equity or 9.90 million shares.
Last year, the Buedelsdorf, Germany-based carrier was close to collapse following a disagreement with majority shareholder France Telecom. The German government, fearing job losses during a tightly fought general election, stepped in with a rescue plan. MobilCom received 162m euros ($182.8m) in government-backed loans to avoid bankruptcy. The European Union objected to an extension of the government guarantees, forcing MobilCom to sell assets.
Last month, MobilCom’s ex-CEO, Gerhard Schmid, was charged with fraud. The charges were in connection with a controversial share option scheme Schmid carried out with his wife in 2001 when he was still at the helm of the company.
This article is based on material originally published by ComputerWire
