France Telecom Reports Loss of Nearly $12 Billion
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France Telecom, nearly drowning in debt and forced to hunt for new leadership after the resignation of its chairman, announced a record loss of nearly $12 billion in the first half and the end of its costly funding for German cell phone affiliate Mobilcom.
The worrisome state of the French telecommunications giant’s finances prompted the French government, France Telecom’s majority shareholder, to announce that it would pump new cash into the company and not let it fail.
Michel Bon, who submitted his resignation at a France Telecom board meeting Thursday, joined a growing list of telecom chiefs to have lost their jobs in the economic crunch hurting the industry.
France Telecom said Bon resigned because of the scale of the company’s loss: $11.9 billion for the first half of the year. That compared with a net profit of $1.91 billion in the year-ago period. The company said its debt grew to $68.3 billion.
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