2023-09-07 16:39:00
It is no longer a taboo. Patrick Drahi has apparently resolved to open the capital of SFR, the jewel of Altice, his telecoms and media group, indicates The world this Thursday. According to the evening daily, the operation was entrusted to the banks Lazard and BNP Paribas. We do not yet know how much of the capital might be sold. Ditto for the desired price. The purpose of the operation is known: to raise cash to allow Altice to pay off (a little) its huge debts, and to postpone its repayment deadlines as much as possible. Altice France, which oversees the operator SFR, Altice Media (BFMTV and RMC) and XpFibre, its antenna dedicated to infrastructure, displays nearly 24 billion euros in debt on the meter. The group is also faced with a major repayment deadline in 2025, amounting to 1.6 billion euros.
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During a meeting with investors last Wednesday in London, Patrick Drahi praised SFR, presented as ” Eiffel Tower “ of his group, according to The world, quoting one participant. The document on which the billionaire relied to seduce his audience also goes in this direction. Different slides, published on the Altice website want to convince that the operator in the red square – which has 20.5 million mobile customers and 6.5 million fiber Internet subscribers – is promised a bright future. They underline, in particular, that the war of promotions, which has caused the sector to suffer so much, is coming to an end, in a context where investments in the networks are declining.
Poor business performance
Nevertheless, the bride is, in reality, not so beautiful. In addition to its high debt, SFR no longer has its precious fixed Internet networks, now housed at XpFibre. The commercial performance of the operator has also not been there since the beginning of the year. In the second quarter alone, SFR lost 29,000 fixed Internet subscribers and 135,000 mobile customers – even if Altice argues that these are low value-added subscribers.
Above all, the Altice group has been in the eye of the storm since July 13 and the revelation of a vast corruption scandal. This involves Armando Pereira, the partner and historical right-hand man of Patrick Drahi, with the reputation of ” cost killer without qualms, as well as several executives of the group. Portuguese justice suspects him of having imposed a network of dubious suppliers in several Altice subsidiaries, and of having unduly taken, through this, large sums.
In the wake of these revelations, several leaders of the group were removed from their posts. Patrick Drahi immediately turned into a firefighter. During a conference call at the beginning of August, he indicated that Altice had cut ties with the suppliers pinned down by the Portuguese justice, stressing that their weight, in terms of volume of purchases, was negligible.
Priority to debt reduction
If Patrick Drahi, usually particularly discreet, has decided to return to the front of the stage, it is because the affair risks cooling investors. To the point of stopping the policy of “deleveraging” of the group, now erected in “top priority”in a thorny context of rising interest rates.
In parallel with a possible sale of part SFR, Altice must soon sell its 92 data centers in France, valued at 1 billion euros. According to The echoes, discussions are advanced with Morgan Stanley Infrastructure Partners, the Morgan Stanley bank’s infrastructure fund. Other assets are also likely to be sold.
The episode is reminiscent in some ways of the 2017-2018 period, where Altice almost ended up on the mat. At the time, the poor results of SFR, weighed down by a haemorrhage of customers, had precipitated the stock market collapse of the group. Like today, Patrick Drahi then returned to the front line to reassure investors, promising them to stop his big purchases on credit and to reduce the group’s debt. Altice had finally managed to get out of this bad patch. Once once more, Patrick Drahi has no room for error.
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