Wednesday, 16 October 2019

AT&T to sell off Caribbean assets for $1.95bn

By Chris Kelly, Total Telecom
Thursday 10 October 19

AT&T has raised $10 billion over the past year to reduce its levels of debt

AT&T has announced that it is to sell off its wireless and fixed line assets in Puerto Rico and the US Virgin Islands, in an attempt to address the company's high levels of debt. As part of the deal, AT&T will divest all of its assets in the US territories, including associated spectrum, real estate and its customer base, comprising 1…

AT&T has announced that it is to sell off its wireless and fixed line assets in Puerto Rico and the US Virgin Islands, in an attempt to address the company's high levels of debt.

As part of the deal, AT&T will divest all of its assets in the US territories, including associated spectrum, real estate and its customer base, comprising 1.1 million wireless subscribers.

“I’m proud of AT&T’s history in Puerto Rico and the U.S. Virgin Islands,” said Jose J. Davila, AT&T vice president and general manager for the region.

“I’m especially proud of our network and the recent network enhancements that have helped AT&T rank as the fastest network in Puerto Rico.1 AT&T also has the most coverage on the island, according to Mosaik."

"Our experienced and committed team members will continue to support these operations as we join Liberty Latin America. Liberty Latin America has expressed its commitment to provide high-quality communications services to the people of Puerto Rico and the U.S. Virgin Islands. And we’re confident that it is equally committed to supporting these communities,” he said.

The deal will net AT&T $1.95 billion, in a cash only deal.

AT&T has already raised around $10 billion in the year to date, through the divestment of various non-core assets, as it looks to cut the levels of debt it owns.

 “This transaction is a result of our ongoing strategic review of our balance sheet and assets to identify opportunities for monetization,” said John Stephens, AT&T chief financial officer.

“But doing so only made sense if we received a fair value from a buyer that is committed to taking this well-run business, with its skilled employees and loyal customer base, and help it thrive. Liberty Latin America has a strong reputation for quality of service, and we believe they have the experience to build on the success of these operations.”

Earlier this year, activist investor, Elliott Management, took a $3.2 billion stake in AT&T.

Elliott Management investment fund has a reputation for aggressively pursuing its own agenda at board level, most notably at Italian telco, Telecom Italia (TIM).

Elliott Management has been involved in a high-profile boardroom tussle at TIM where it has wrested control of the boardroom away from the company's biggest shareholder, Vivendi, in a bid to optimise shareholder returns.

After taking the stake in AT&T Elliot Management issued a statement, urging AT&T to return to its core business operations, stating that a recent string of high-profile acquisitions had seen It erode its business focus and shareholder value.

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