Orange flotation delayed amid market turmoil

Orange and France Telecom have delayed until early next year plans to seek an estimated 100bn euro (£60bn) initial public offering of the enlarged mobile group.

Orange and France Telecom have delayed until early next year plans to seek an estimated 100bn euro (£60bn) initial public offering of the enlarged mobile group.

The so-called New Orange, which includes the formerly UK-listed company and the mobile assets of France Telecom, becomes the most high profile victim of the market slump affecting telecoms, media and technology stocks.

Hans Snook, Orange chief executive, and Michel Bon, France Telecom chairman, had hoped to sell up to 20 per cent of the mobile group for around 20bn euros before the year end. The money would have been targeted to reduce the French group's 60bn euro debt mountain as well as provide cash and an equity currency to expand the mobile group.

Mr Bon said: "The process of combining the mobile assets of France Telecom with Orange to create a leading global wirefree business is now well advanced. We are able to confirm our intention to float the enlarged Orange early in the new year." Mr Snook said: "I look forward enormously to introducing the enlarged Orange to all the group's customers and potential investors early in the new year."

The delay comes amid a sharp downturn in telecoms and technology stocks, although many issues, including Vodafone staged a partial recovery yesterday. The slump in stock markets has crippled the market for new equity issues and corporate bonds, which have seen record volumes of issues in recent quarters to fund the heavy capital demands of telecoms companies. Data published by Thomson Financial Securities yesterday showed that companies had raised a global sum of $150bn from flotations and shares issues in the first nine months of the year, which was 65 per cent higher than the same period last year.

One senior banker said: "France Telecom is going to wait and see how the market develops. Orange is a very strong brand and has good coverage. It is one of only three companies with a panEuropean mobile network."

It is expected that New Orange's IPO marketing will begin in January with the flotation to follow in February. The value of the float, however, will depend on how telecoms stocks fare in the coming months.

It is understood that the 2001 float date reflects the legal and administrative complexity of transferring Orange and France Telecom's 20-odd operating companies into the new group.

The statement from Messrs Snook and Bon was also designed to quash speculation about the mobile unit's leadership. It emerged earlier in the week that Jean François Pontal, a close associate of Mr Bon, will become chief executive of New Orange with Mr Snook becoming executive chairman.