COMMISSION DECISION
of 2 August 2004
on the State Aid implemented by France for France Télécom
(notified under document number C(2004) 3060)
(Only the French version is authentic)
(Text with EEA relevance)
(2006/621/EC)
1. PROCEDURE
2. DESCRIPTION OF FRANCE TELECOM
3. CHRONOLOGICAL DESCRIPTION OF THE FACTS AND FINANCIAL SITUATION OF THE COMPANY
3.1. The data known during the first half of 2002 and events at that time
|
1999 |
2000 |
2001 |
Debt ratio(20) |
0,78 |
0,89 |
0,92 |
Debt/equity(21) |
3,61 |
8,25 |
12,16 |
Times interest earned (22) |
14,52 |
5,39 |
3,2 |
Source: NERA. |
|
2002 |
2003 |
|||||
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Total 2003 |
|
Amount in EUR billion (23) |
3,89 |
3,61 |
8,86 |
4,08 |
4,09 |
2,23 |
19,26 |
Source: NERA. |
3.1.1. The downgrading of France Télécom's credit rating
|
S & P |
Moody's |
Fitch |
|||
Short term |
Long term |
Short term |
Long term |
Short term |
Long term |
|
Situation in May 2002 |
A2 |
BBB+ |
P2 |
Baa1 |
F2 |
BBB+ |
24 June 2002 |
|
|
P3 |
Baa3 |
|
|
25 June 2002 |
A3 |
BBB |
|
|
|
|
05 July 2002 |
|
|
|
|
F3 |
BBB- |
12 July 2002 |
|
BBB- |
|
|
|
|
Source: NERA. |
3.1.2. Analysis of credit spreads
[Bild bitte in Originalquelle ansehen] |
Source: Bloomberg. |
[Bild bitte in Originalquelle ansehen] |
Source: Bloomberg. |
[Bild bitte in Originalquelle ansehen] |
Source: Bloomberg. |
[Bild bitte in Originalquelle ansehen] |
Source: Bloomberg. |
3.1.3. France Télécom's share price
[Bild bitte in Originalquelle ansehen] |
Source: Bloomberg. |
3.1.4. The events of July 2002
3.2. The data published on 13 September 2002 and events at that time
3.2.1. The data published on 13 September 2002
EUR billion |
|
30 June 2002 |
|
Exchangeable or convertible bonds |
10,75 |
Bonds |
39,85 |
Leasing operation |
0,42 |
Bank loans |
6,62 |
Other, non-bank loans |
0,72 |
Drawings on syndicated loans of EUR 15 billion |
8,15 |
Drawings on syndicated loans of USD 1,4 billion |
1,48 |
Other bank overdrafts and other short-term borrowings |
4,14 |
Total gross debt |
72,13 |
Movable investments |
(0,15) |
Cash in hand |
(2,29) |
Net indebtedness |
69,69 |
Source: France Télécom's consolidated accounts: half year ended 30 June 2002. |
3.2.2. September 2002
3.2.3. October 2002
3.2.4. December 2002/January 2003
3.2.5. February/March 2003
4. COMMENTS FROM THIRD PARTIES
4.1. Comments from Telecom Italia
4.2. Comments from WorldCom
4.3. Comments from C
4.4. Comments from A
4.5. Comments from Bouygues and Bouygues Télécom
4.6. Comments from Cable & Wireless
4.7. Comments from AFORS Télécom
4.8. Comments from Cégétel
4.9. Comments from LDCOM(75)
4.10. Comments from B
4.11. Comments from Tiscalinet
4.12. Comments from D
4.13. Comments from France Télécom
4.14. Comments from ECTA
5. COMMENTS FROM FRANCE
5.1. Summary of the facts
5.2. The Company's financial situation
5.3. Duty of care of the State as shareholder
5.4. Rationality of the TOP plan
5.5. Application of the prudent investor principle to the participation in the strengthening of the Company's capital base
5.6. The shareholder loan
5.7. The announcements made by the State
5.8. Movements in France Télécom's share price and spreads
6. OBJECT OF THE PRESENT DECISION
7. ASSESSMENT OF THE MEASURE AT ISSUE IN THE LIGHT OF ARTICLE 87(1) OF THE TREATY
8. PRINCIPLE OF THE PRUDENT PRIVATE INVESTOR IN A MARKET ECONOMY
9. COMPATIBILITY OF THE AID
(Amounts in EUR million)(1998 data, EUR 1 = FRF 6,55957) |
|||
|
Financial year ended 31 December |
||
LIABILITIES |
2000 |
2001 |
2002 |
Share capital |
4 615 |
4 615 |
4 761 |
Additional paid–in capital |
24 228 |
24 228 |
24 750 |
Reserves |
2 748 |
4 682 |
–5 434 |
Group's share of net result |
3 660 |
–8 280 |
–20 736 |
Conversion reserve |
59 |
844 |
3 315 |
Own shares |
–2 153 |
–5 002 |
–9 977 |
Shareholders' equity |
33 157 |
21 087 |
9 951 |
Minority interests |
2 036 |
8 101 |
9 780 |
Non–reimbursable funds and the like |
— |
— |
— |
Long– and medium–term debt |
30 547 |
54 543 |
46 898 |
Other long–term liabilities |
5 220 |
8 663 |
14 978 |
Total long–term liabilities |
35 767 |
63 206 |
61 876 |
Current portion of long– and medium–term debt |
7 542 |
1 596 |
13 495 |
Bank overdrafts and other short–term borrowings |
25 165 |
11 365 |
10 490 |
Trade accounts payable |
7 618 |
8 631 |
8 503 |
Accrued expenses and other payables |
7 729 |
7 259 |
7 395 |
Other current liabilities |
8 113 |
2 481 |
1 712 |
Deferred income taxes |
512 |
374 |
87 |
Deferred income |
1 946 |
3 258 |
3 200 |
Total current liabilities |
58 625 |
34 964 |
44 882 |
Total liabilities |
129 585 |
127 358 |
106 587 |
Source: France Télécom Annual Reports 1999, 2002, 2003. |
(Amounts in EUR million)(1998 data, EUR 1 = FRF 6,55957) |
||
|
2001 |
2002 |
Turnover |
43 026 |
46 630 |
Cost of services and products sold |
(17 619) |
(18 558) |
Selling and administrative expenses |
(12 520) |
(12 579) |
Research and development expenses |
(567) |
(576) |
Operating income/loss before amortisation of fixed assets and of actuarial adjustments in the early retirement plan (EBITDA) |
12 320 |
14 917 |
Operating income/loss (EBIT) |
5 200 |
6 808 |
Interest expenses, net (excluding perpetual bonds redeemable for shares — TDIRA) |
(3 847) |
(4 041) |
Interest expenses on TDIRA |
— |
— |
Foreign exchange gain/loss, net |
(337) |
136 |
Discounting of early retirement plan |
(229) |
(216) |
Current income/loss from integrated companies |
787 |
2 687 |
Other non-operating income (expense), net |
(5 904) |
(12 849) |
Corporation tax |
2 932 |
(2 499) |
Employee profit-sharing |
(131) |
(148) |
Net income/loss from integrated companies |
(2 316) |
(12 809) |
Equity in net income/loss of affiliates |
(890) |
(367) |
Goodwill amortisation |
(2 531) |
(2 352) |
Exceptional goodwill amortisation |
(3 257) |
(5 378) |
Net income/loss of the consolidated group |
(8 994) |
(20 906) |
Minority interests |
714 |
170 |
Résultat net (Part du groupe) |
(8 280) |
(20 736) |
Source: Rapports Annuels France Telecom 2001, 2002. |
(EUR billion) |
|||
|
31.12.2001 |
30.6.2002 |
31.12.2002 |
Total long-term liabilities |
63,2 |
64,3 |
61,8 |
Current portion of liabilities |
1,6 |
9,2 |
13,5 |
Bank overdrafts and other short-term borrowings |
11,4 |
13,8 |
10,5 |
Gross liabilities |
76,2 |
87,3 |
85,8 |
Marketable securities |
(1,1) |
(0,1) |
(-) |
Cash |
(2,9) |
(2,3) |
(2,8) |
Other long-term liabilities |
(8,7) |
(15,2) |
(15,0) |
Net financial liabilities |
63,5 |
69,7 |
68,0 |
Source: France Télécom annual reports and consolidated balance sheets as at 30 June 2002 |