France Telecom chairman resigns after $11.9 billion loss - German firm Mobilcom in meltdown

Associated Press | September 13, 2002

[HAL9000]

France Telecom announces resignation of chairman, huge loss

PARIS, Sep 13, 2002 (AP WorldStream via COMTEX) -- Debt-laden France Telecom on Friday announced the resignation of its chairman and reported a 12.18 billion euro (dlrs 11.9 billion) net loss for first-half of 2002, its biggest loss since going public.

French Finance Minister Francis Mer said a successor for Michel Bon, whose resignation as head of the firm was announced overnight, would be named by the end of the month or early next month.

Mer said the government, the firm's majority shareholder with a 55 percent stake, would work with Bon's successor to determine a recovery strategy for the beleaguered telecommunications giant.

"We need to create the right conditions to re-establish the credibility of the company," Mer said in a radio interview. "It's a magnificent company. We just need to give them back the resources with which to work."

The company's huge first-half lost was France Telecom's biggest since listing in 1997. It compared with a net profit of 1.95 billion euros (dlrs 1.911 billion) in the same period last year.

Copyright 2002 Associated Press, All rights reserved

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France Telecom says it is stopping funding to troubled German firm

PARIS, Sep 13, 2002 (AP WorldStream via COMTEX) -- France Telecom said Friday that it was cutting off funding for Mobilcom, a move the troubled German cellphone firm had warned would likely force it toward bankruptcy.

In a statement, France Telecom said its directors agreed at a board meeting Thursday "not to seek to take control of Mobilcom and to no longer respond to its requests for financial support."

The French telecommunications giant, which owns 28.5 percent of Mobilcom, cited the "troubling situation" of the indebted German firm, its "structural difficulties" and "the weakness of its customer base" in announcing its decision.

The head of Mobilcom, Thorsten Grenz, had warned Thursday that Mobilcom likely would have to apply for bankruptcy protection within days if France Telecom stopped funding. Mobilcom has more than 5,000 employees.

The France Telecom statement, which announced huge losses in the first half of 2002 for the French company, also blamed its decision to stop funding Mobilcom on difficulties in Germany's telecommunications sector.

"An excessive number" of firms were awarded licenses to build next-generation phone networks like Mobilcom's, the statement said. It also blamed German rules governing telecommunications, saying there was a "lack of flexibility of the German regulatory framework necessary for market consolidation."

Copyright 2002 Associated Press, All rights reserved

[Joe Boucher]

If it's bad for france and or germany I am all for it. These "allies" suck.
Both get the majority of their oil from the mideast. All they do is suck up to those countries.
Doesn't matter how many times we pull their butts out of the fire or rebuild their miserable countries.

[paul544]

The more I see reports like this, the more it becomes obvious that the "roaring 90's" was a whole lotta $h!t!