Priority to deleveraging. During his communication operation in August, Patrick Drahi, founding president of Altice, made it his leitmotif. Entangled in the corruption case of his right–hand man, Armando Pereira, and confronted with a mountain of debts – about 60 billion euros – the boss of the telecom group must give pledges to his creditors.
This will involve, in particular, asset sales. The great maneuvers have begun in this direction. According to Les Echos, Patrick Drahi is close to an agreement with the infrastructure fund of the Morgan Stanley bank to sell all or part of its 92 data centers in France, valued at one billion euros.
An agreement in principle has reportedly been reached by Morgan Stanley Infrastructure Partners but “a number of conditions must still be discussed before reaching a conclusion,” according to a source interviewed by the business newspaper. Other investors have reportedly studied the file, including the Canadian institutional fund manager Omers and the German asset manager DWS, a subsidiary of Deutsche Bank.
The sale of infrastructure, a well-established exercise
Morgan Stanley is used to negotiations with Patrick Drahi, recalls Les Echos. In 2018, Altice sold to the American bank, associated with Horizon Equity Partners, 75% of its telecom towers in Portugal, valued at 660 million euros. A year later, it bought 49.99% of its fiber network in Portugal, estimated at 4.6 billion euros. In 2020, the telecom tycoon sold 49.99% of LightPath, a manufacturer of equipment for lasers and optical fiber, to him.
The sale of infrastructure to get out of debt is not in itself new in the telecom world and dates back before the Pereira case. In 2021, Altice sold Hivory, its TowerCo in France, to the Spanish operation Cellnex. That is to say 10,500 mobile telephony sites previously managed by SFR and valued at 5.2 billion euros.
The sale of data centers would only be a first step according to the Echoes of a larger movement of asset disposal. Caught by the throat and in a context of rising credit rates, the group should quickly sell other family jewels. Altice had for a time put on the market the operator Meo in Portugal (valued at about 7 billion euros) or the cable operator Suddenlink in the United States (20 billion euros) before giving up their sale. In addition, Patrick Drahi is the largest shareholder of BT (formerly British Telecom), holding 18% of its capital.
SFR ready to be sold?
During his world investor tour, Patrick Drahi was in London on Wednesday, September 6th. The French-Israeli billionaire has announced, according to Bloomberg, that he will unveil various debt reduction options in the coming days, in particular a “capital increase and partnerships with different actors”.
With regard to asset sales, mandated advisers are conducting an examination review, including within Altice France, Altice International and its subsidiaries in Portugal, the Dominican Republic and Teads, the French specialist in online advertising video, bought in March for 285 million euros. The media assets (BFM-TV, RMC …) would escape this review according to The World.
When asked if Altice France – so SFR – was for sale, Patrick Drahi answered in London with a joke. “Is leaving France an option? I am in England today, tomorrow in the United States and next week I am in Israel. Yes. »
According to Le Monde, the process is already underway. Altice would be ready to sell part of the capital of SFR, its main asset in Europe. The investment bank Lazard and BNP Paribas would have been in charge of “finding the best potential buyers and putting them in competition to raise the price. The size of the block put up for sale is not known. »
The transition from four to three operators is an old sea snake that has been shaking the French market since the arrival of Free Mobile in 2012. The same Free who sees himself today in the role of consolidator. “Such an operation would entail a thorough examination by the European competition authorities,” however, recalls Le Monde. The opinion of Brussels on the proposed merger in Spain between Orange and the Iberian operator MasMovil, will be closely scrutinized.
In the meantime, Patrick Drahi reiterated, from London, his wish that Altice France improve its cash flows by one billion euros by 2027 “by combining a reduction in costs, a reduction in expenses and perhaps an increase in prices. “SFR’s suppliers and subscribers are being warned.