Pat on the back

30 November 2018 By Liam Proud Follow @liamwardproud

Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.

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Altice Europe said on Nov. 30 it was in exclusive talks to sell a 49.9 percent stake in a French fibre-broadband business to infrastructure investors.

Allianz Capital Partners, Axa Investment Managers and OMERS infrastructure - an arm of the Ontario municipal employees’ pension fund - will pay Altice 1.8 billion euros for the stake, implying an overall equity value of 3.6 billion euros.

The unit, called SFR FTTH, will sell wholesale fibre connections to all operators on the same terms and conditions, including Altice-owned SFR.

Altice, which is controlled by billionaire Patrick Drahi, will also sell technical services to the business including subscriber construction, connection and maintenance.

Altice said that the unit’s capital spending requirements will be covered by a 1.8 billion euro non-recourse, off-balance sheet debt package over the next four years.

Altice’s Amsterdam-listed shares were up almost 10 percent to 2.03 euros at 0850 GMT on Nov. 30.

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