Altice Says It Has No Plan to Raise Cash Through Equity Sale

(Bloomberg) -- Embattled billionaire Patrick Drahi sought to shore up the plunging stock price at Altice NV, the phone and cable company weighed down by $50 billion in debt, assuring investors he won’t sell new shares to raise cash.

“Altice confirms that it is not in preparation of a cash raising by means of an equity or equity-linked issuance and has no intention to pursue such action within the group including Altice USA,” the Amsterdam-based company said in a statement published at 12:30 a.m. Monday. Altice shares rose as much as 16 percent, the biggest intraday advance since June 2015.

Altice is trying to soothe investor concerns over its ability to manage its debt load topping $50 billion. Before Monday, its stock had plunged 50 percent since Nov. 2, when the company predicted full-year earnings at the lower end of a previous forecast due to delays to cost-cutting efforts in France. The stock tumbled 12 percent on Friday, its 10th decline in 11 sessions.

Drahi’s investment company, Next Alt SARL, doesn’t hold any margin loan exposure related to Altice, Altice said in its statement, which it said was a response to “market speculation and misinformation.” Next hasn’t sold Altice stock since the company’s IPO except about 300,000 shares sold to managers, as disclosed in 2016, the company said. Altice said it had 1.205 billion shares outstanding, excluding treasury shares, at the end of September.

Market Rumors

“Although operational issues in France were the original trigger, leading to a loss of confidence from investors, we believe market rumors spread by speculators shorting Altice NV shares might explain some of the turmoil the stock has been in,” Thomas Coudry, an analyst at Bryan Garnier, said in a report Monday. He recommends buying the shares.

Click here for a look at short interest in Altice NV shares

The company said its plan to sell “non-core assets” in Europe has begun and disposals may happen as early as the first half of 2018. The company is trying to reduce its net debt in Europe to 4 times earnings, from 5.1 currently, Chief Financial Officer Dennis Okhuijsen said at the Morgan Stanley TMT conference in Barcelona on Wednesday.

Altice surged 12 percent to 9.06 euros at 11:15 a.m. in Amsterdam, giving the company a market value of 14.6 billion euros ($17.2 billion).

Drahi has amassed Altice’s debt pile by expanding through acquisitions, buying SFR Group in France and Cablevision Systems and Suddenlink Communications in the U.S. The company has been spending for restructuring as part of a turnaround plan at SFR, where competition is weighing on prices and subscriber growth.

Looking for ways to ease the challenges of the French phone market through mergers, the billionaire recently paid a visit to a top adviser of French President Emmanuel Macron, people familiar with the matter said last week. The company isn’t considering putting SFR on sale, said one of the people.

French politicians and regulators have opposed consolidation and Altice’s rivals see a diminishing need for mergers as the market recovers. Still, with four major wireless carriers and billionaire Xavier Niel’s low-cost carrier Iliad SA luring subscribers with promotions, the French market remains one of Europe’s most competitive.

Altice described its liquidity as “strong,” saying it has 1.66 billion euros of cash and 3.5 billion euros of undrawn and available revolving facilities.

--With assistance from Alexandre Boksenbaum-Granier

To contact the reporter on this story: Ville Heiskanen in Helsinki at vheiskanen@bloomberg.net.

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Phil Serafino

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