FEBRUARY 12, 2001
Orange float price sinks but F1 sponsorship OK
THE flotation of Orange is going ahead but the price of the shares has been cut several times in recent weeks with the shares expected to be offered at around $10 each. This is about a third of what the company's owner France Telecom had expected when it bought the mobile phone firm last year. The cut in price has been caused because of concerns among shareholders about the long-term future of the telecommunications industry. France Telecom is offering a simultaneous bond issue to help stimulate interest. The result is that around 20% of Orange may be sold and around $8bn will be raised. The money is needed to help fund the purchase of stock which is still owned by Orange's former owner Vodaphone AirTouch.
The company's investment in F1 is not however in any danger as the deal was a real bargain for the telephone company, negotiated at the last minute before the start of the 2000 season. At the time it was suggested that the deal was for a massive amount of money but our sources say that it may be worth as little as $10m a year.