Bouygues seeks $5.3bn for 3G

date: 19th December 2000, source: ft.com

Bouygues, the French construction and communications group, is looking to borrow E6bn ($5.33bn) to help finance a third-generation wireless network for its mobile phone subsidiary, Bouygues Telecom.

Bouygues said it was in talks with a number of banks but would not say whether the quest for additional financing was linked to the breakdown of its talks with Telecom Italia, which had hoped to lift its 10.8 per cent stake in Bouygues Telecom.

The move comes before a January 31 deadline to apply for the French auction of 3G mobile phone licences. Telecom Italia's mobile phone unit, Telecom Italia Mobile, had hoped to raise its holding before that date and have more influence over the management of Bouygues Telecom.

Bouygues said two weeks ago that it was "no longer" negotiating with Telecom Italia, without specifying why talks had been called off. The French company said it was already talking to a "restricted number" of companies that might want a stake in Bouygues Telecom alongside Telecom Italia.

Still, Bouygues has made clear it wants to keep majority control of the mobile phone unit. It said it was looking for a long-term loan of between 8 to 10 years. About E2.3bn of the E6bn will be to refinance an existing loan. The company said investors in Bouygues Telecom had already invested E5.1bn which can be used to develop the new network.

Earlier this year, Bouygues discussed a possible collaboration with NTT DoCoMo, the Japanese telecoms company. Deutsche Telekom has also shown interest in the French auction and has indicated it would not want to make a bid on its own.

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