2023-10-02 14:18:33
The French Altice is in a difficult economic situation. Philippe Wojazer / REUTERS
Indebted to the tune of 60 billion euros across his empire, Patrick Drahi has just raised 800 million euros in loans for the subsidiary Altice International.
New money and a way to test the markets’ attitude towards it. Altice International, one of the three major branches of Patrick Drahi’s telecommunications and media empire, announced this Monday that it had raised 800 million euros on the financial markets. This senior debt, maturing in 2027, allows it to extend the maturity of its debt on this entity bringing together its activities in Portugal, the Dominican Republic, Israel and also the digital start-up Teads. “Thanks to this transaction, the average maturity of Altice International’s debt capital structure increases from 4.6 years to 4.9 years, compared to 4.6 years previously, with no major maturity before 2027”welcomes Patrick Drahi’s group in a press release.
It is an important operation for the billionaire’s group, splashed by a corruption scandal in Portugal targeting in particular the co-founder of Altice and close to Patrick Drahi, Armando Pereira. Considering himself betrayed by the latter, the businessman nevertheless promised that this affair of illegal taking of interest would have no financial impact on his empire, burdened with a colossal debt of 60 billion euros. For Altice International, this represents a debt of 8.5 billion euros.
Also readCorruption, debt, sale of BFM… The truths of Arthur Dreyfuss, CEO of Altice France
Having made debt reduction Altice’s priority, Patrick Drahi first seeks to give himself oxygen with refinancing operations allowing him to roll his debt over more distant maturities. This also allows it, like this Monday with the loan of 800 million euros, to test the temperature of the lenders.
Selling Teads?
Contracted at 5.00% above Euribor, this new term loan maturing in October 2027 should have actuarial rates of 10% according to an analyst. “It’s extremely expensive. Only sectors with high Ebidta margins can afford this type of operation. But these are the market conditions today. In the past, Altice has already had periods with extremely high rates”underlines Benoît Soler, credit analyst at Keren Finance.
In the longer term, Patrick Drahi is exploring different options, including the entry of minority shareholders into the capital of one or more of his companies. All assets, in all geographies, have been under review since the beginning of September, including France with SFR. But some might be tailored for full sales. This is the case with Teads for example. Last week, several sources told the site Merger Market that Patrick Drahi had hired the bank Morgan Stanley to sell this digital start-up acquired in 2017 and recover up to 3 billion.
The sale of Meo, the number one telecoms operator in Portugal, might also allow Drahi to recover a few billions by cutting the link with the “rotten” branch of the group involved in the corruption affair. Operators as well as several investment funds might be interested if necessary, according to several sources.
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