France Télécom SA (‘FT’) was formed in 1991 as a legal person governed by public law, and since 31 December 1996 had had the status of a public limited company. Since October 1997, FT had been listed on the stock exchange. In 2002 the French State’s participation in FT’s capital was 56.45%, the remainder being divided between the public (32.25%), France Télécom itself (8.26%) and employees of the company (3.04%).
In the period from March to June 2002, Moody’s and Standard & Poor’s downgraded FT’s rating and also downgraded its prospects to negative. In particular, on 24 June 2002 Moody’s downgraded FT’s rating for long and short term credit notes to the lowest investment grade. At the same time, FT’s share prices fell significantly.