Altice France looking at ‘multiple options’ to reduce debt pile

Patrick Drahi’s Altice France is looking at multiple options for the sale of assets as part of a drive to reduce the company’s debt pile.

The choices on the table include the sale of the company’s data centres – the most advanced option – and other options which may be pursued in parallel, company executive told debt investors during the Altice French unit’s first-half call.

Altice last year was reported to have hired investment bank Perella Weinberg to seek buyers for nine in 10 data centres in France with a view to raising around €1 billion.

Altice also plans to fully consolidate Xp Fibre, the fibre building outfit created from the merger of SFR’s fibre activities with FTTH infrastructure wholesaler Covage, which still has minority financial investor shareholders. This is expected to “become a cash cow” from 2025 when the fibre build is complete, delivering more cash flow to service debt.

However, Xp Fibre will only become cashflow positive by the end of this year, and free cashflow positive next year, meaning the company will consider consolidation as an option in 2025.

Speaking on the debt investor call, Drahi said the media business in France is not for sale and any change there would not have an impact on EBITDA.

Altice France’s main operating unit, service provider SFR, saw telecom revenue decline by 2.5% in the second quarter and total revenue declined by 2.6% to €2.789 billion. Altice Media revenue was down 5.3% to €89 million.

Telecom EBITDA fell by 5.4% and total EBITDA fell by 5.7% to €1.084 billion.

At the end of June the company had 33.9 million addressable fibre homes (via FTTH or FTTB), up 1.2 million homes from Q1.

The company had proforma net debt of €23.8 billion at the end of June.

On the corruption scandal engulfing Altice Portugal, executives on the call said that Altice France was doing business with eight impacted suppliers and has committed to end relationships with these.

Overall, the number of supplier companies identified as potentially suspect by the Portuguese investigation number around 100.

On the debt investor call, Drahi said that “our objective has been to shed light on the precise course of events and reveal the truth”.

He said that the suspect suppliers to Altice France accounted for about 0.5% of total purchasing in France.