Telecoms and cable group Altice Europe (ATCA.AS) said on Friday it would sell a 50% stake in its Portuguese fibre network to Morgan Stanley Infrastructure Partners (MS.N) for 2.3 billion euros ($2.5 billion) to help pay down its debt.
Shares in the Amsterdam-listed group, founded and majority-owned by billionaire Patrick Drahi, were up by nearly 6% after the news by 1100 GMT.
Altice Europe is saddled with 31 billion euros in debt and flipped its strategy two years ago from cost-cutting towards gaining clients and selling infrastructure assets to reduce debt and raise its stock price.
The sale of a 49.99% stake in Altice Portugal FTTH to the U.S. bank’s infrastructure investment division will be done over three years, generating 2.3 bln euros in total, of which 1.57 billion in 2020 and then 375 mln in 2021 and 375 mln in 2026, subject to some performance targets.
Altice Europe will keep control of the asset and is the sole other shareholder.
The sale brings total proceeds from various fibre and mobile asset sales over the past two years to 5.7 billion euros, Drahi said.
“(This sale) will accelerate the deleveraging of the group towards its stated leverage target,” the Franco-Israeli tycoon said. “It will open the way to significant refinancing transactions in 2020 enabling us to accelerate our announced program of debt interest reduction.”
Altice Europe’s total net debt is equivalent to about twice its yearly revenues and it has pledged to bring its financial leverage to the equivalent of four times of its core operating profit.
Drahi said last month that the group would start buying up some of its own shares once it reaches a debt to core operating profit ratio of 4.25 times.
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