Some 20 per cent of the government-owned France Telecom will be floated on the stock market, the French economics and finance minister, Mr Dominique StraussKahn, announced in Paris yesterday. He told a news conference that the market placement would start on September 22nd. The move starts the process of opening up the telecommunications company's capital with a view to a Bourse listing on October 20th. Deutsche Telekom will acquire a shareholding of 7 to 8 per cent under an exchange of holdings, the minister added, with 3 to 4 per cent of the capital being reserved for employees.

All this means that 30 to 32 per cent of the France Telecom will be disposed of by the state in the coming weeks. The base price will be decided on October 6th.

A later capital increase, in which the state is not expected to take part, will reduce the state stake "in the long run" to around 63 per cent, the minister said. "The state will retain a large majority stake." He said current estimates put the value of France Telecom at around 200 billion francs (£22 billion) and "the resources from this partial privatisation will not contribute in any way to balancing the 1998 budget".

Mr Michel Delebarre, the author of a government-commissioned report on the state-owned telephone monopoly, said the shares could be listed on the French stock market as early as October.