Orange raises £3.5bn to fund growth

Orange, the UK's third biggest mobile phone operator, yesterday raised £3.5bn in a syndicated loan.

The company sought to use the capital raising exercise to support its claim that it is an independent company operating at arm's length from Vodafone AirTouch, which acquired the business when it took over Mannesmann last year.

British Telecom has questioned Orange's right to bid for the new UMTS generation mobile phone licences, separately from Vodafone. BT has called on the Government to ensure there is no "collusion" between the two companies on their bids.

Vodafone is putting Orange up for sale to meet European Union anti-trust rules following the Mannesmann takeover.

Yesterday's capital raising will enable Orange to retire £1.75bn of existing debt, leaving it with £2bn cash to fund its expansion plans.

Graham Howe, deputy chief executive, said yesterday: "This is substantial financing which increases our ability to support the development of the independent Orange business."

The loan was arranged jointly by Chase Manhattan, CIBC, Dresdner Kleinwort Benson, and HSBC.