Finland's largest telecom operator, Sonera, posted better-than-expected third-quarter results today and set a billion euro rights issue to boost its ailing balance sheet.
The company said proceeds from the rights issue would be used to cut debt. It said the Finnish government, its majority owner, supported the issue and planned to take up its full allocation.
Sonera has debts of around euro 4.1 billion linked to the acquisition of expensive third-generation mobile phone licences in Europe.
Sonera said it planned to issue up to 743,534,486 new shares in the issue. The price is to be set on November 9th, but Sonera said it would be at a discount to current market values.
Sonera posted a third-quarter profit minus one-off items of euro 50 million, beating estimates that forecast a loss of 65 million.
Sonera shares, poor performers in recent months, reversed initial losses to add five cents to euro 4.08 as the market digested the news.
As part of a new strategy outlined today, Sonera said it would cap spending on third-generation licences and networks, and continue to sell off non-core assets to pay off its debts.