France Telecom has started tackling its huge debts by launching new shares worth 15bn euros (£10.1bn; $15.9bn).
Rapid expansion left France Telecom heavily indebted
The company will be selling the shares at 14.50 euros apiece, a 25% discount on the price of its shares over the weekend.
The move comes less than a month after the company reported one of the biggest losses ever seen in Europe.
But news of the offer - of which 9bn euros is to be bought up by the state, which still has control of the firm - hit France Telecom's shares pushing them down as much as 8.5% at the opening.
But by the end of the day's trading, France Telecom shares had recovered to their opening level.
"Our financial situation is under control," said Thierry Breton, the company's chairman.
"With the newfound confidence of our shareholders, France Telecom will have all the advantages of for meeting and winning the challenges of growth and excellence, and by 2005 become again one of the leading European operators."
France Telecom's debt burden stacked up during an acquisition spree in the years leading up to the popping of the internet bubble, and amounts to as much as 70bn euros.
In the wake of its loss of 20.7bn euros for 2002, the company has promised to slash its debt in half by 2005.
Last week, it sold its stake in Italian mobile operator Wind to Italian state-controlled utility Enel for 1.3bn euros.
Shareholders have already agreed to allow another 15bn euros should it prove necessary.