|
Telekom to raise $12.5B?
|
 |
April 15, 1999: 5:22 a.m. ET
Stock slides as Deutsche Telekom unveils capital increase, flat earnings
|
LONDON (CNNfn) - Shares in Deutsche Telekom fell as much as 4 percent Thursday after Europe's largest telecom company announced plans for a capital increase and flat first-quarter profit.
The stock market heavyweight slumped in early trading, before recovering to trade around 1 percent lower at 40.49 euros in Frankfurt.
Germany's dominant phone company gave little detail about its planned rights issue, which it must bring to the market before the summer.
Deutsche Telekom said it has prior shareholder approval to issue up to 286.3 million shares before that time. At the current share price the company could raise up to 11.6 billion euros ($12.5 billion).
The company promised more details in early May but said that the government and state-owned bank Kreditanstalt für Wiederaufbau would not take up their rights. This will result in a dilution of the state's holding, which currently stands at more than 70 percent. The telecom carrier was partially privatized in 1996.
The market reacted nervously to the planned rights issue, with investor confidence further undermined by first-quarter earnings figures that showed net profit up only 4 percent to 1.04 billion marks ($575 million).
Revenue declined 7 percent to 17.3 billion marks. The company blamed the fall on increased competition and a fall in income from long-distance and international call charges.
These effects were off-set by 600 million marks in cost savings and a reduction in losses at affiliates of 250 million marks.
|
|
|
|
|
|
Deutsche Telekom
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
