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Breton 'to head France Telecom'
PARIS, France -- Troubleshooter Thierry Breton is to be the new chairman of France Telecom, French business daily Les Echos has reported on Tuesday. Breton, 47, has been the favourite to take over the post after the resignation of former chairman and chief executive Michel Bon last month. Breton is currently the executive chairman of electronic group Thomson Multimedia. France Telecom (PFTE), under the stewardship of Bon, spent billions on expanding during the telecom boom of the late 1990s -- a process that has left the company with debts of 69.7 billion euros. (Full story) Breton's appointment is expected to be announced in the French official gazette on Tuesday or Wednesday, when Breton would take his seat at France Telecom's next monthly board meeting, Les Echo said. The decision is in the hands of the government, which holds a cabinet meeting on Wednesday. France Telecom had already drawn up a plan to reduce costs by 6 billion euros over three years. But Breton will be given several weeks to draw up a plan to restore the troubled groups balance sheet, Les Echos added. Breton may be joined on the board by Thomson's deputy managing director, Frank Dangeard, who would replace finance director Jean-Louis Vinciguerra as number two.
France Telecom's shares, which have fallen more than 95 percent since hitting a peak in March 2000, ended Monday over 12 percent down at 6.94 euros after Industry Minister Nicole Fontaine told the weekly Le Journal du Dimanche that a government loan was unlikely to be enough to rescue the 55.5 percent state-owned telecoms group. Such a move could fall foul of European Union rules on state aid. Her colleague at the Budget Ministry, Alain Lambert, told Europe 1 radio that the government wanted a refinancing plan that would not impact on budget finances. Analysts expect Breton's first move could be to raise about 15 billion euros to cover looming payments on a paralysing debt. But a government backed-loan would give France Telecom crucial breathing space as the companies shares trade near historic lows. Breton is well known in both corporate and political circles -- having been called on twice before by the government to help rescue an ailing French company. Five years ago, he was picked to run Thomson, which at the time was suffering under a heavy debt load and was on the verge of collapse. Now, after taking it public and establishing key partnerships -- among them, with technology giant Microsoft -- Breton has lifted Thomson to the No. 4 position among the world's consumer electronics companies. In 1993, the government asked Breton to help turn around troubled French computer maker Bull. As second in command, he also managed to pull Bull from the edge of bankruptcy. Breton began his own software company at the age of 24 and helped create an open-air theme park in France when he was 31. He has also taught mathematics at a French high school in New York and is the author of eight books.
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