France Telecom begs for tax-payer bail-out
Will it pass muster with the EU?
Reports from Paris suggest that the treasury is mulling alternatives that include backing a new bond issue, subscribing to a new issue of preference shares or giving the company a loan. Any deal would have to be approved by the European Union, which is expected to take a skeptical approach, as the French government is underwriting an expansion policy that no commercial company could afford.
France Telecom was able to boost first-half revenue by 10% to 22.5bn euros ($22.5bn) as a 5.8% decline in its fixed-line voice and data services was offset by growth on its Orange mobile operation, Wanadoo ISP and portal business, and international voice and data services.
With its debt expected to rise to $70bn by the end of the year, the company has agreed to sell its broadcast unit TDF for $1.6bn and its Dutch cable operator Casema. Satellite operators Eutelsat and Stellat have also been earmarked for disposal.