Shares in France Telecom fell by 2.76 percent to 20.42 euros in early Paris trading on Monday after the government said it would sell at least five percent of its stake to reduce national debt. The CAC-40 index of leading shares had lost 0.95 percent overall.
On Sunday, Economy Minister Christine Lagarde said in a statement that the transfer of at least five percent of shares in the telecommunications operator would bring in some 2.7 billion euros (3.6 billion dollars). "The State has today committed to the transfer of five percent of the capital of France Telecom," the minister said, adding that that figure could rise to seven percent of the capital according to the "demand expressed".
According to several brokers, the sale could take place at between 20.40 and 20.70 euros per share. The French state, which currently holds a 32.41-percent stake in the telecoms operator, will see its share drop to between 25.5 and 27.4 percent, the ministry said.
"The profit from the transfer of these stocks and shares will be fully allocated to reducing the debt of the State and public services" as stipulated by law, Lagarde said in the statement. French public debt stood at 1.142 billion euros at the end of 2006.
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