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KPN, Belgacom in talks
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June 21, 2001: 8:03 a.m. ET
Debt-ridden KPN opens talks with Belgium's Belgacom
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LONDON (CNN) - Beleaguered Dutch telecoms operator KPN said it is in talks with Belgian peer Belgacom.
The heavily-indebted company declined to comment on reports in Belgian newspaper L'Echo that it had approached Belgacom via Goldman Sachs with a merger proposal.
KPN spokesman Marinue Potman said: "We are in talks with more than one partner, Belgacom is one of them. "We are exploring possibilities... but we are not sure about the outcome."
The Dutch company has been struggling to deal with its  23 billion ($19 million) debt burden which it incurred through high spending on 3G (third generation), or high speed, mobile permits that give it the right to offer wireless Internet and video services.
KPN's shares have halved since the start of June on persistent reports its was planning a rights issue of as much as 5 billion, and the Netherlands' largest phone company has previously said it is studying every option to cut it debt mountain.
The former state-monopoly, still 34.7 percent owned by the Dutch government, has the lowest credit rating among former government-controlled phone companies.
Such a sell up would be Europe's biggest next to British Telecom's recent 5.9 share sale.
Belgacom, indebted to the tune of 400 million, owns Belgium's premier operator Proximus and is a shareholder in the Netherlands' smallest mobile phone operator, Ben.
It is 50.1 percent owned by the Belgian government with the remainder held by a group led by U.S. telecoms operator SBC.
KPN has turned from a profitable company into a loss-making firm, while Belgacom posted a 10 percent hike in net profit last February for 2000, up at 479 million euros on sales up more than 11 percent, in excess of 5 billion. 
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