PARIS-France Telecom said it reached an agreement with the banks holding a credit facility of $4.6 billion for MobilCom, the German operator in which France Telecom holds a 28.5-percent stake. The final agreement is subject to France Telecom completing a number of conditions before Sept. 30.
France Telecom and MobilCom, which owns a third-generation license in Germany, are in a dispute regarding the German company’s future.
Four banks, Deutsche Bank, Merrill Lynch, ABN Amro and Societe Generale, agreed to refinance the MobilCom debt, which will become bonds that are convertible into France Telecom shares at a price of $46 per share. France Telecom will account for the debt as quasi-equity. The agreement was structured to allow France Telecom, which is under pressure from the financial community for its high debt load, to avoid adding MobilCom’s debt to its existing obligations.
The French operator is expected to take full control of MobilCom once financial details are ironed out.
