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News > International
KPN set for rights issue
June 12, 2001: 3:45 a.m. ET

Report: Dutch telecom operator plans rights issue soon to pay down 3G debt
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LONDON (CNN) - Dutch telecoms operator KPN plans to sell up to 5.5 billion euros of shares to help relieve its debt burden, a report said on Tuesday.

KPN, which has graphic23 billion ($19.4 billion) of debts because of high spending on third-generation (3G), or high-speed, mobile networks may announce the sale as early as next week, the Financial Times reported.

The sale of shares by the Dutch company to its existing shareholders at a discount will be Europe's biggest after British Telecom's recent graphic5.9 billion share sale.

KPN's shares dropped a further 7 percent to graphic6.67 in Amsterdam on Tuesday - after shedding more than a third of their value last week - as investors absorbed the rights issue plan amid concern about the company's debt and strategy.

KPN believes the share sale is the only way it can quickly access cash, despite the hammering its share price has taken since news of the possible rights issue leaked out, the report said.

In an unusual move, KPN is also bringing in senior supervisory board members to play a hands-on role in working out future strategy and a debt reduction programme.

That decision is certain to trigger speculation about the position of senior KPN executives, the FT said.

KPN is expected to press on with the sale of non-core assets to pay down its debt, but the possibility of a link-up with Belgacom, the Belgian telecoms operator, has slipped down the list of possibilities, the report said.. graphic




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