Debt-ridden tech companies find new ways to earn money
Published:
9 May 2001 y., Wednesday
The wireless industry is quickly becoming a leader in creative finance, as one company after another attempts to reconcile the debt they incurred after buying third-generation (3G) spectrum. Other companies are simply trying to remain liquid at a time when telecom spending is down sharply and revenue streams have all but dried up. But the amount of activity over the past several weeks has been mind-boggling, with several major international telecom companies playing a high-stakes game of musical chairs. Most of the action currently revolves around British Telecom, which lost its chairman, 35-year BT veteran Sir Iain Vallance. Sir Iain resigned amid a swarm of criticism over the company’s costly venture into 3G mobile networks, and he was promptly replaced by Sir Christopher Bland, chairman of the BBC, who wasted no time in announcing BT’s new direction. Sir Christopher has the unenviable task of reducing BT’s monstrous $43 billion debt, and it quickly became clear how he intended to do that.
Last week alone, the company announced the sale of stakes in Spain’s No. 2 mobile carrier, Airtel; Japan Telecom’s mobile phone unit, J-Phone; and Malaysia’s Maxis Communications for a total of $7 billion. In addition, the company will be selling its London headquarters and its fleet of cars. Add to that the $7 billion the company hopes to recover with a rights issuance as early as this week, and it’s well on its way toward improving its fast-declining credit rating.
Šaltinis:
RED HERRING
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