Branson fights shy of mobile flotation

VIRGIN Mobile may not float on the stock market after all, Financial Mail has learned. Instead, Sir Richard Branson's mobile phone operator may increase borrowings.

It took £115 million in 2000 from a group of six lenders led by Royal Bank of Scotland and JP Morgan and it is being encouraged to carry out a larger fund-raising exercise.

Speaking at the annual mobile phone festival in Cannes, Tom Alexander, Virgin Mobile chief executive, said: 'An initial public offering is still the main plan being explored, but banks are saying we could borrow cheaply without giving up equity in the business.'

Branson's closest advisers are known to be suspicious of stock market fund-raising because any Virgin share offer would inevitably attract thousands of inexperienced small investors who are expensive to service and easy to disappoint.

Meanwhile, leaders of the mobile phone world in Cannes were still digesting market leader Vodafone's abortive bid for US mobile phone group AT&T Wireless.

Chief executive Arun Sarin said: 'We had a chance to do a deal that would have been good, but we wouldn't pay more than was right.

'Now we are back where we were before - a strategic partner in the best mobile business in the US.'