Troubled German operator MobilCom has received a lifeline from a syndicate of 17 banks. The E4.7 million deal will make it easier for France Telecom, which owns a 28.5% stake in MobilCom, to launch a takeover.
The agreement involves France Telecom guaranteeing 90% of MobileCom’s loans if equipment suppliers sign a E1.1 billion vendor financing deal. France Telecom is also requesting the resignation of MobilCom’s CEO, Gerhard Schmid.
The deal is partly intended to appease France Telecom’s own creditors and will see E4.23 billion of MobilCom’s E4.7 billion bank loans changed into a bond that is convertible into France Telecom shares in 2003.