The founder and former CEO of MobilCom AG, Gerhard Schmid, has finally agreed to hand over his 32% stake in the carrier to a trustee, a move that should pave the way for the rescue bid organized by the German government.
France Telecom will be financing the 7bn euro ($7bn) bail-out, which has been in jeopardy for the past week as Schmid remained at loggerheads with the German government over his choice of trustee. In the end, both sides settled on Helmut Thoma, a MobilCom supervisory board member.
The contract Schmid will sign runs over two years, and does not require him to recognize his debt to MobilCom, which has been another sticking point in the negotiations.
A number of banks should now provide the carrier with a much-needed 162m euro (163m) cash injection, to help it stave off imminent collapse, as it struggles with debts and liabilities approaching $7bn. The Buedelsdorf, Germany-based carrier also confirmed that it would cut 1,850 jobs and focus on its wireless services business under a proposed restructuring plan.
However, a final question remains over Gerhard Schmid’s wife, who still owns an 8% stake in the company. France Telecom had stated in the past that it would not finance any bail-out if Schmid has any say in the company.