BRUSSELS, Belgium-The European Commission widened its inquiry proceedings into German company MobilCom, specifically looking at $157 million in loans paid to MobilCom, covered by guarantees issued by the German federal government and the Land of Schleswig-Holstein. The loan guarantees are now to be extended to the end of 2007.
The German government said it would be possible to replace the loans covered by the guarantees out of the company’s operating profits only by 2007, rather than the original September 2003 and May 2004 dates. Without extending the guarantees, it would be not possible to extend the loans, the government said.
The EC said it is not convinced MobilCom could not pay some of the loans by selling assets.
MobilCom is restructuring after withdrawing from the German third-generation market and focusing on its mobile telephony and reselling businesses. The company sold its 3G base stations and other equipment to KPN Telecom’s German subsidiary E-Plus in May.
