Altice to Sell European Towers Stakes, Raising $2.9 Billion

(Bloomberg) -- Altice Europe NV is raising 2.5 billion euros ($2.9 billion) in cash by selling stakes in mobile transmission towers in France and Portugal, as the telecommunications company tries to rein in debt.

As part of the sale plan, Altice is creating a company with private equity firm KKR & Co. for the more than 10,000 towers it owns in France and setting up a similar venture for the Portuguese assets with Morgan Stanley and Horizon Equity Partners, the company said Wednesday in a statement. The proceeds of the sale are “significantly ahead of expectation,” said Robert Grindle, a Deutsche Bank AG analyst who was expecting them to be about 2 billion euros.

Investors dumped Altice stock last year over concerns that it couldn’t sustain its debt, which stood at about 32.2 billion euros at the end of the first quarter. The company, founded by entrepreneur Patrick Drahi, has put the brakes on acquisitions, has spun off its U.S. unit and is pursuing asset sales.

“Both tower businesses will be uniquely positioned to grow as they provide increasingly important infrastructure services to operators in both markets,” Drahi said in the statement.

Altice will keep control of the newly created tower company to be set up with KKR, with the investment firm owning 49.99 percent, according to the statement. SFR TowerCo, as it will be called, will include 10,198 towers currently operated by Altice’s French SFR unit plus 1,200 new ones.

In Portugal, 75 percent of the future Towers of Portugal company will be split between Morgan Stanley and Horizon, with Altice keeping the rest. The assets in the country include 2,961 towers.

“Owning quality towers today is important,” as some players in France are now lacking sites, Alain Weill, chief executive officer of Altice Europe, told reporters on a call. Adding that the deployment of so-called 5G networks will require even more sites, he said he believes Altice is well-positioned because of its expertise and technical teams.

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