France Telecom signs deal to buy back loans to Mobilcom

Monday, December 2nd 2002, 12:00 am

By: News On 6

PARIS (AP) _ France Telecom SA said it has finalized a deal to buy back $6.1 billion in loans granted to Mobilcom AG, a move that should trigger a rescue plan for the beleaguered German mobile phone operator.

In a statement Sunday, France Telecom said the move would cover loans to Mobilcom from banks as well as equipment suppliers Nokia and Ericsson AB.

Under the deal, France Telecom said it will buy back the loans in exchange for bonds redeemable for new shares in France Telecom, convertible at $46.7 each.

France Telecom said the agreement will mark the end of a long-running saga over Mobilcom's financial woes once shareholders in the German mobile phone company have signed off on a planned rescue package.

France Telecom's new chairman, Thierry Breton, is to present a recovery plan for the debt-burdened telecommunications group this week.