Bouygues Telecom is planning to increase its share capital in order to offset the costs of acquiring a 4G licence last year.
During a conference call with analysts yesterday, Eric Haentjens, CFO of the telco, said that a share capital increase was…
Bouygues Telecom is planning to increase its share capital in order to offset the costs of acquiring a 4G licence last year.
During a conference call with analysts yesterday, Eric Haentjens, CFO of the telco, said that a share capital increase was “necessary” and “will be done in the fourth quarter”.
When contacted by TelecomFinance, Bouygues said it would make no further comments on the conference call.
“This was already suggested in a letter the CEO sent to parliament in spring, lobbying against tough regulations, so it was not a surprise” Jean-Michel Koster, analyst at CM-CIC Securities, told TelecomFinance. “The company’s earnings are under a lot of pressure at the moment as the market is competitive and its debt is rising so they need to recapitalise.”
Koester added that he was not optimistic the upcoming capital increase from existing shareholders would solve the telco’s debt problems. “It depends whether they pay a dividend to shareholders,” he said. “They have to reinvent their business model and strategy; it will take a lot of work to turn the company around.”
