Brussels, 09/07/2003 (Agence Europe) - The European Commission is to widen the formal inquiry proceedings into German telecom services supplier MobilCom which found itself in financial difficulty after its main shareholder, France Télécom, announced its withdrawal from the joint 3G business. On 21 January 2003, the Commission authorised rescue aid in the form of a federal guarantee on a loan of EUR 50 million from state-owned bank KfW. At the same time, the Commission launched a formal enquiry into an 80% guarantee issued by the Federal Government and the Land of Schleswig-Holstein on a EUR 112 million loan by a consortium of public and private banks. The planned extension of the guarantees was notified to the Commission by the German government in March 2003, saying it might only be possible to repay the loans from the company's operating profits in the course of 2007, not on the dates originally agreed, September 2003 and May 2004. It said that without extending the guarantees it would not be possible to extend the loans (totalling EUR 138.3 million). Given the information supplied by the German authorities, the Commission is not satisfied that MobilCom could not go some way towards repaying the loans by rapidly selling off available assets. There would also seem to be a realistic possibility, at least in the medium term, of replacing the state-guaranteed loans with financing from other sources which would not carry any state guarantee. The Commission consequently doubts whether an extension of the guarantees to 2007 is compatible with the common market, and has decided to widen the inquiry already in progress in order to consider whether the state guarantees are indispensable to the successful restructuring of the company, and if so for how long.