BT takes stern measures to hack $42.6bn debt

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British Telecom has revealed plans for two minority flotations and several asset sales, in an attempt to pay $14.2 billion off the company’s $42.6 billion debt. But shareholders had been calling for the break-up of the group into its six businesses, and shares fell 5%, to half their worth at the end of last year.

A spokesman said that the company could no longer be managed in a centralised way, because of changes in the market place. It intends to float up to a quarter of BT Wireless, which includes Cellnet in the UK, next year. Wireless is valued at between $42.6 billion and $56.8 billion.

BT intends to raise capital from a 25% listing of Yell, its telephone directories unit, and, if approval is forthcoming from the DTI and Oftel, it will also list a quarter of NetCo, its wholesale business. It also hopes to announce the listing of a minority stake in Ignite, its international Internet network business, by the end of the year.

By concentrating on Western Europe and Japan, and selling off Internet and wireless assets, principally in Asia, BT hopes to raise another $7.1 billion.

Profits in the six months to September fell to $943.5 million from $1.63 billion.

BT

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