Altice case: Drahi defends himself by saying he is “betrayed” and promises a major cleaning

Altice boss Patrick Drahi stepped up on Monday to defend his telecoms and media group, the target of corruption charges in Portugal, saying he was “betrayed” by some and downplaying the impact of the case. , while announcing an extensive internal investigation.

To reassure the markets, alarmed by the affair as much as by the group’s heavy indebtedness, the businessman took advantage of a conference of analysts to explain that he felt “betrayed and deceived by a small group of ‘individuals’, after the arrest in Portugal of his right-hand man and co-founder of Altice, Armando Pereira.

The latter was arrested in Lisbon on July 13 and indicted as part of an investigation for corruption and money laundering.

The owner and boss of Altice, who rarely speaks in public, had never yet spoken on this affair which splashes the whole group.

“We immediately suspended about fifteen people in Portugal, France and the United States”, following an internal investigation, announced Patrick Drahi, promising to do “full transparency” on this affair.

“It is very unpleasant to see the word corruption next to the name of our group and most of the time, in the press, next to my name, but our group is a victim and not accused”, added the boss of this telecom empire, present mainly in Europe and the United States and which employs a total of nearly 100,000 people.

Patrick Drahi explained that the judicial investigation, which relates to purchases by the group, only targeted Portugal but acknowledged that “Altice entities outside Portugal have done business with some of the suppliers identified by the Portuguese authorities”.

“But this case only affects a very small part of our overall purchases”, less than 5%, he argued.

Another argument, the role of Armando Pereira: he was only “responsible for technical supplies”, without being involved in “the operations of any of the entities of Altice international”, parent company of Altice Portugal.

Patrick Drahi, who will be 60 on August 20, also assured that this scandal would have “no impact” on the finances of its branch Altice International, whose results were presented on Monday.

– Worried markets –

“Some individuals, especially in the purchasing branch, carefully concealed their actions from me, their colleagues and the whole group,” defended the Franco-Israeli billionaire.

Patrick Drahi at the inauguration of Altice Campus in Paris on October 9, 2018 (AFP/Archives/ERIC PIERMONT)

“We are conducting extensive international investigations…in order to carry out an independent review,” he said.

The group notably suspended Tatiana Agova-Bregou, the executive director of content, acquisitions and partnerships, implicated in the wiretapping of Portuguese justice, as well as Alexandre Fonseca, co-CEO of Altice, ex-executive president of Altica Portugal. Yossi Benchetrit, head of purchasing in the United States and son-in-law of Armando Pereira, has been fired.

This case comes at the worst time for the group, whose overall debt of nearly 60 billion euros worries in times of rising rates.

The intervention of the businessman may not be enough to reassure investors.

On Wall Street, Altice USA shares – the group’s only listed entity – fell 7% after speaking out. On the other hand, the interest rate on Altice France’s bond maturing in January 2025 fell from 8.66% before the analysts’ conference to 6.79% shortly after its intervention, a positive sign.

“No surprise: he could hardly say anything else,” Lionel Melka, partner at Swann Capital, told AFP.

“In the best of cases, it’s a huge lack of governance, in the worst, an organized fraud. The only thing that can calm concerns is that cash goes up through asset sales”, decided the analyst , recalling that the group is in the process of selling its pylons and data center. “The market will want more,” he said.

“Even in the absence of the suspected fraud, the situation is very tense due to the rise in rates, even if the group does not have big maturities right away. But the case may lead to a loss of confidence of the creditors and precipitate the fall”, he noted.

Altice must present Tuesday the results of its branch Altice France, parent company of SFR, indebted to the tune of approximately 23 billion euros. In addition to telecoms, Altice is also present in the media, where it owns in France in particular RMC and BFMTV.

© 2023 AFP

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