LONDON, Oct 11: Stricken German telecoms group MobilCom is set to clinch a two-to-four-week extension to a 4.7 billion euro ($4.64 billion) loan which was due to be repaid on Monday, banking sources said on Friday.

MobilCom, which has halted plans to build a mobile network and has slashed jobs in an attempt to salvage parts of its core business, would have been pushed into insolvency had its increasingly edgy creditor banks demanded repayment next week.

But industry sources close to talks between the 17-bank syndicate and the German group’s estranged partner France Telecom, which has informally promised to take on the debts, said they were banking on a formal agreement soon.

“The loan is likely to be extended in line with the two-to-four-week timeframe on the memorandum of understanding with France Telecom,” one banker said.

“France Telecom is making positive progress and the 17 banks are moving forward in good faith...But if there’s no movement on...an agreement, we will call the loan and everyone will take huge losses,” he warned.—Reuters