C&W Comms cuts footprint to reduce debt

Cable & Wireless Communications (CWC) has agreed to sell the majority of its businesses in its Monaco & Islands division as it attempts to scale back its geographic footprint and focus on its core operations.

Cable & Wireless Communications (CWC) has agreed to sell the majority of its businesses in its Monaco & Islands division as it attempts to scale back its geographic footprint and focus on its core operations.

CWC is selling the assets to Bahraini telecoms firm Batelco Group for an enterprise value of $680m.

The news follows confirmation in September that the two firms were in discussions.

CWC will sell its interests in businesses in the Maldives, Channel Islands and Isle of Man, the Seychelles, South Atlantic and Diego Garcia as well as a 25% shareholding in Compagnie Monegasque de Communication, the company which holds CWC's 55% interest in Monaco Telecom.

The proceeds of the sale will be used to pay down debt and increase CWC's "financial flexibility". Following the disposal, the group's net debt position will be cut to around $937m, down from $1,588m at the end of September.

In a statement on Monday morning, the firm said: "The disposal accelerates the delivery of CWC's strategy to reshape its business, reduce its geographic spread, and focus on the Central American and Caribbean region, as well as increasing the company's financial flexibility."

The $680m will be paid on a cash- and debt-free basis, and represents 6.3 times EBITDA (earnings before interest, tax, depreciation and amortisation) of the businesses being sold. Batelco will pay CWC on completion.

CWC Chief Executive Officer Tony Rice said: "The disposal of the Monaco & Islands portfolio is consistent with our objective of building a growth-driven, Pan-America focused business. The Monaco & Islands portfolio is a premium telecoms business and we are pleased to have agreed a deal that achieves an attractive value for our shareholders.:

In addition, the companies have also agreed to certain put and call option arrangements over CWC's remaining 75% interest in CMC. These options will allow Batelco to buy up a contolling stake in Monaco Telecom for $345m.

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
2 Feb 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

Best savings accounts – February 2023
Savings

Best savings accounts – February 2023

Interest rates on cash savings are making a comeback. We look at the best savings accounts on the market now
3 Feb 2023
The best one-year fixed savings accounts - February 2023
Savings

The best one-year fixed savings accounts - February 2023

Earn almost 5% on one-year fixed savings accounts.
3 Feb 2023
After slumping 42% last year, what's next for Scottish Mortgage?
Investment trusts

After slumping 42% last year, what's next for Scottish Mortgage?

After a spectacular couple of decades, the Scottish Mortgage Investment Trust fell by 42% last year. We take a look at the trust's performance and dis…
3 Feb 2023