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AT&T flogs some European holdings to raise cash

US TMT group AT&T is raising $1.1 billion from the sale of its majority state in Central European Media Enterprises.

CME operates across Bulgaria, the Czech Republic, Romania, Slovakia and Slovenia and seems to be mainly involved in TV, both advertising and subscription-based. AT&T got hold of a 60% share in CME thorough its acquisition of Time Warner and has apparently decided Eastern European telly is no longer part of its grand plan.

Paying off a bit of its vertiginous debt pile presumably is, though, so the $1.1 billion AT&T will trouser from this deal is not to be sniffed at, as well as the $575 million in CME debt it was guaranteeing. In corporate-speak reducing your debt pile is called ‘de-levering’.

“The sale is consistent with AT&T’s plans to monetize non-strategic assets as it continues to pay down debt,” said the brief announcement. “Given the company’s confidence in reaching a net debt-to-adjusted EBITDA ratio in the 2.5x range by the end of this year, shareholders should expect that share buybacks will be in the mix in the fourth quarter of 2019, along with continued de-levering.”

We have to assume CME is ‘non-strategic’ due to its location, rather than its areas of business, since it operates in precisely the areas AT&T paid so much for Time Warner to gain access to. It also seems fair to assume that this is part of a broader process of Time Warner pruning by AT&T and that other holdings outside of the US will also be made available for sale.


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