Altice to de-lever, promises no new M&A as it seeks to end share slide

facade_campus_sfr_maxime_dufour__photographies_3Altice has confirmed that it plans to de-lever its balance sheet and bring leverage down in line with or below its targets over time. It said it would not pursue “any new meaningful M&A opportunities” and would dispose of non-core assets, including its transmission tower portfolio.

Altice said it had taken action to kick off the disposal programme as early as the first half of next year.

Altice’s management have been engaged in a collective effort to shore up confidence in the group and halt the slide in its share price, with a series of announcements that helped its stock gain some lost groun after a period in which it lost about half its value. Altice’s shares fell from over €16 at the beginning of November to just over €8 on Friday, but opened about 10% higher today.

The company hit out at what it has described as “misinformation” and market speculation that contributed to a calamitous fall in its share price in the days following its announcement of disappointing Q3 financials.

The cable and telecom investor said it was not preparing a share issue to raise cash, and said it had “no intention to pursue such action” within the group, including for its Altice USA unit.

The group also denied that it Altice’s majority shareholder Next had any margin loan exposure related to Altice, and said that Next had not sold any shares in the company since the Altice IPO with the exception of 300,000 ordinary shares sold to group managers last year.

On November 12 Bloomberg issued an update correcting its total free float shares count for Altice by an additional 81 million shares, which Altice said had created the false impression that hose shares had been sold by Next. Altice also said the company’s management had not taken any active decision to sell shares, although a sale of shares in September attributed to its CFO was executed by a financial institution on maturity of a funded collar.

Patrick Drahi

Patrick Drahi

Altice said it had no margin loan exposure related to its ownership of Altice USA and said it had a robus, diversified and long-term capital structyure, with a weighted average debt maturnity of 6.3 years. The group said it had about €1.66 billion of cash on its balance sheet at the end of Q3 and access to about €3.5 billion of undrawn revolving credit with an average maturity of 3.9 years.

SFR founder Patrick Drahi, who has now taken the reins at the company with a revamped management team after the departure of CEO Michel Combes, wrote to staff at French unit SFR on Friday to reaffirm that serving its customers better remained its number one priority. Drahi characterised the share price movement over the last three weeks as “irrational”. Improving the operational performance of SFR, which has continued to lose subscribers to rivals, is central to the company’s plan to put its finances on a better footing.

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