31 December 2002 -- France Telecom is launching FT 2005, a redevlopment initiative featuring four components. The move follows a study of the Group's activities and finances, concluded in December.
The four developments are:
1. Top: a program to improve operational performance, which will generate more than EUR15bn in free cash flow to reduce debt;
2. "15+15+15": a plan to strengthen the Group's financial structure (15bn via the TOP program; 15bn in fresh equity, with the participation of the French State in its capacity as shareholder pro rata to its shareholding interest, i.e. for approximately 9 billion euros; and 15bn from refinancing the Group's debt)
3. A strategy focused on customer satisfaction and integrated operational management of a portfolio of assets comprising businesses that are leaders in their principal markets, with strong brands such as France Telecom, Orange, Wanadoo and Equant. Assets with weak strategic and financial positions or those for which majority control is not possible will be considered being divested;
4. A completely new management team with a simplified organisation and greater responsibility assigned to managers.
FT said it is seeking to achieve greater strategic and financial flexibility with the aim of a net debt/EBITDA ratio of between 1.5 and 2 by the end of 2005.
Presenting FT 2005, last month, Thierry Breton, France Telecom Chairman and CEO said: "With FT 2005, France Telecom gives itself the means to bring about its own recovery and regain control over its future. This marks a change from September, when the sole possibility appeared to be refinancing under the worst possible conditions.
"The study that has been carried out and the measures we are about to take demonstrate that France Telecom is once again capable of taking the initiative."
He said the compoany's first priority is to loosen the financial grip in which it is now caught, to put France Telecom back into a positive momentum.
"Whether in fixed-line, mobile, Internet or corporate networks, we enjoy leadership positions through our France Telecom, Orange, Wanadoo and Equant brands. The quality of our services create tremendous potential for operational improvements that will permit us through the TOP program to generate cash in order to accelerate our debt reduction.
"Thanks to the motivation of all the Group's employees and the commitment of our management team, I am confident that we will meet the ambitious objectives set out by the TOP program and FT 2005. This will enable us to achieve our ambition of making France Telecom one of the top-performing operators in Europe".