KPN's new chief secures fresh loan

KPN, the troubled Dutch telecoms carrier, yesterday won some respite from its problems as the group named Ad Scheepbouwer as its new chief executive to replace Paul Smits while announcing a new 2.5bn euro (£1.5bn) credit facility.

Shares in KPN, which is battling against a 22.8bn euro wall of debt, jumped 10.5 per cent to 2.63 euros. The stock, which had traded as high as 71.67 euros in March last year, fell to a low of 2.21 euros last week.

Mr Smits, who will remain on the company's board to oversee its mobile businesses, had been under intense pressure to quit after both the spectacular slump in the company's shares and the recent collapse in its merger talks with Belgium's Belgacom.

Mr Scheepbouwer, who was formerly chief executive of Dutch postal group TPG, will replace Mr Smits by January next year. His appointment is said to have been key in the signing of KPN's new credit facility, arranged by a consortium of Dutch and international banks.

Ruling out further alliance talks, Mr Scheepbouwer said the new credit facility gave KPN "enough time to refocus our business plan".

The company's debts had racked up after spending on acquisitions as well as on snapping up third generation (3G) mobile phone licences.

KPN would not divulge the terms of its new credit facility other than to stress the new arrangement gave it "sufficient time to examine alternative plans thoroughly, and to implement the best one for maximising shareholder value. Any medium-term financing gap has been solved through this agreement".

Mr Scheepbouwer said: "I strongly believe that KPN has great value and I feel honoured to put my experience and expertise into place to create a strong KPN once again."