PARIS (Reuters) – Dutch-based telecoms and cable group Altice, plans to raise 2.5 billion euros ($2.9 billion) from selling stakes in its telecoms towers businesses in France and Portugal to reduce its debt, the company said on Wednesday.
The group, whose founder is billionaire Patrick Drahi, is restructuring to revive its fortunes after growing rapidly in recent years through a series of acquisitions. Its plan is to build up the towers businesses and boost revenues through the stake sales, it said.
Altice said it had entered an exclusivity agreement with U.S. KKR, to form a new French company called SFR TowerCo, comprising 10,198 sites operated by Altice’s French susbsidiary SFR. The private equity firm will have a 49.9 percent stake.
That deal, reported earlier by Reuters and expected to close in the fourth quarter of 2018, will also involve building 1,200 new towers, which Altice said would generate 250 million euros in proceeds for SFR within four years.
Altice’s Portuguese subsidiary will also sell a larger 75 percent chunk of a newly-formed Portuguese towers business, to be named Towers of Portugal (TOP), to Morgan Stanley Infrastructure Partners and Horizon Equity Partners.
That business has 2,961 sites and includes an agreement for 400 new towers.
Alain Weill, chief executive of Altice Europe, said proceeds from the agreements would go toward reducing the group’s 31 billion-euro debt pile in Europe.
Altice, whose debt equals more than twice its annual revenues, is finalizing a series of non-core disposals, including its entire operations in the Dominican Republic.
Weill did not rule out the newly-formed towers businesses eventually being listed on the stock market.
The planned transaction values SFR TowerCo at an enterprise value of 3.6 billion euros.
“These are promising businesses,” Weill told journalists, adding, however, they had just been created and talk of a spin-out was premature.
Reporting by Sarah White and Dominique Vidalon; editing by Richard Lough and Elaine Hardcastle