France Telecom Shares Fall on Stake Sale
France Telecom shares fell Monday after the French Finance Ministry said it plans to sell a stake in the company worth up to 3.7 billion euros ($5 billion) to cut public debt.
The French government said Sunday it plans to sell 130 million shares in the country's largest telecom company, but that number could increase to 180 million, or 7% of France Telecom's share capital, depending on the demand.
Shares in France Telecom slipped 1.9% to 20.60 euros ($27.67) in Paris.
Newly appointed Finance Minister Christine Lagarde said in a statement that the state "intends to remain a significant shareholder in France Telecom in the medium term."
After the planned offer, the French government, will still own between 25.5% and 27.4% of Europe's No. 2 telecommunications company, behind Deutsche Telekom , in terms of the number of customers and revenue.
French President Nicolas Sarkozy has said he would seek to reduce the country's debt to 60% of gross domestic product -- down from more than 65% in 2006 -- within the next five years.
France Telecom recently sold its Dutch unit for just over 1.3 billion euros ($1.75 billion) to Deutsche Telekom.