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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
5 steps to shield your money from the taxman before the Budget
Experts have warned Labour is planning a tax raid in its upcoming Budget. We share five steps to shield your money from the taxman
By Katie Williams Published
-
The trading apps that let you put fractional shares in an ISA
Advice HMRC is set to change ISA rules to allow fractional shares to be included in the tax wrapper. Here are the trading platforms and trading apps that support this.
By Marc Shoffman Published