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.

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.

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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.