Swisscom lobbies Swiss shareholders

Alder wants other shareholders to dip into their pockets Keystone Archive

Swisscom, the majority government-owned telecoms operator, has urged shareholders of the national airline, Swiss, to lend the carrier fresh credit.

Weekend media reports also speculated that the carrier was close to securing around SFr350 million ($276 million) from the country’s biggest banks, Credit Suisse and UBS.

However, the credit deal, which Swiss said on Monday was still being negotiated, is understood to fall short of the sum required by the carrier as a financial buffer.

In a series of media interviews, Jens Alder, chief executive of Swisscom, called on Swiss shareholders to find the extra cash.

“We are ready, within the bounds of a concerted effort with other shareholders, to help by providing financial capital,” Alder told Switzerland’s “Finanz und Wirtschaft” newspaper.

Alder said Swisscom had been informed that shareholders were being asked to provide some SFr100 million, over and above the credit being negotiated with the banks.

Alder added that if Swiss were to collapse, it would have a negative impact on the national economy.

Alder’s call appeared to win the backing of at least one major Swiss shareholder on Monday.

Walter Haefner, the head of the AMAG car importing giant, which owns 6.8 per cent of the airline’s shares, said he would provide Swiss with SFr10 million.

“A national airline is important for the Swiss financial sector and, despite difficult circumstances, Swiss has made a good start,” AMAG said in a statement.

Looking for support

Speaking prior to the AMAG announcement, Zurich Cantonal Bank analyst Patrik Schwendimann told swissinfo that the airline’s shareholders would be reluctant to provide fresh cash.

“It’s uncertain if other big Swiss companies will follow Swisscom’s example,” he said.

“They largely lost all the money they invested last time, so they’re probably not so keen. But it’s always possible.”

Swiss statement

In a statement released on Monday, Swiss said it was engaged in ongoing negotiations with various foreign and domestic banks.

“In addition to commercial credit provided by the banks, support from shareholders is also desired,” the statement said.

“This could take the form of a shareholders’ loan, for example.”

Swiss said the extra money was to provide liquidity in the event of unforeseen developments.

Swiss is currently estimated to be losing at least SFr1 million per day, as it continues a cost-cutting programme that will reduce the airline’s staff and fleet by one-third.

The airline was launched in April 2002 after the collapse of Swissair the previous year. Swiss was backed by a SFr2.6 billion investment from major banks, and cantonal and federal governments.

Since then, the airline’s reserves have shrunk to less than SFr1 billion. It hopes to break even in 2004.

Resistance

The Zurich-based “Tages-Anzeiger” reported on Monday that Alder’s appeal to shareholders had met resistance.

The pharmaceuticals giant, Novartis – which holds 3.4 per cent of Swiss shares – told the newspaper that it would not provide any additional funds.

Its Basel-based competitor, Roche, said it had not received a request for money, while Zurich Financial Services said any additional contribution would need to meet the bank’s investment criteria.

Swisscom owns 3.4 per cent of the airline’s stocks. The carrier’s largest shareholders are Credit Suisse (10 per cent), UBS (10.4 per cent), the canton of Zurich (10.2 per cent) and the federal government (20 per cent).

swissinfo, Jacob Greber in Zurich

In brief

Jens Alder, the chief executive of Swisscom, has urged the shareholders of Swiss to give the airline fresh credit.

Swiss is negotiating with its major banks for some SFr350 million ($276 million).

Alder said another SFr100 million was being sought from shareholders.

The money would be used by Swiss as a buffer against possible crises such as last year’s war in Iraq and the Sars pneumonia virus.