Sonera: More cash, new CEO

August 27, 2001 Posted: 1114 GMT

LONDON (CNN) -- Finnish telecom operator Sonera reassured investors by raising money in a share sale to meet its financing needs and naming a new CEO.

Shares of Sonera, the country's former telephone monopoly, catapulted higher after the company said at the weekend it had raised 565 million ($514 million) in July by selling 21.9 million shares of Deutsche Telekom.

The stock was trading at 5.44 by midday Monday, up 5 percent from Friday's close, but drifting back after a surge of as much as 18 percent at the start of trading. The price is still about four-fifths below its high for 2001.

Sonera, which is majority owned by the Finnish state, said on Monday its new chief executive would be Harri Koponen, currently a U.S.-based manager with Swedish telephone-equipment maker Ericsson.

Koponen, a Finn in his late thirties, replaces Kaj-Erik Relander, who resigned in June. His appointment ends weeks of uncertainty over Sonera's leadership.

The company's stock has been depressed amid concerns about its ability to sustain a heavy debt burden. The high level of borrowings stems mostly from the costly purchase of a string of licenses to offer third-generation mobile-phone services. 

The company announced on Thursday that it aimed to cut around 1,000 jobs, or some nine percent of its workforce, as part of a wider rationalisation to contend with weak market conditions.

The cuts should save 50 million to 60 million, Sonera said.

The news that the Finnish company had sold Deutsche Telekom (FDTE) shares in July also provided a boost to the German phone operator's stock price, which added 3.5 percent in Frankfurt to reach 18.67.

Telekom's shares have languished in the past three weeks amid concern that a number of large owners of the company's stock may offload their holdings in the next few weeks, causing of oversupply of shares.

The investors in question obtained their Telekom shares when the German company paid in stock for its purchase of U.S. cellphone company VoiceStream Wireless.

The report that Sonera had already sold 21.9 million shares last month indicated that there may be fewer Telekom shares sold in the coming weeks than analysts expected.  

	Want the full story? Search for free company info...
	Enter Company Name:-