To get out of debt, Altice France cannot count on its flagship, SFR. The second French operator saw its turnover and profits fall again in 2023, with an uninterrupted flight of its subscribers.
After having sold part of its data centers for 500 million euros to Morgan Stanley and its media branch (BFM, RMC, etc.) for 1.55 billion euros to the shipowner CMA CGM, the telecoms giant will have to take action other measures to reassure its creditors.
According to The world, Patrick Drahi’s group would attempt a daring operation with its lenders. On March 20, during the presentation of its results, Altice France indicated its wish to reduce its debt, which peaked at 24.3 billion euros at the end of 2023, to 16 billion euros in order to “ ensure a sustainable future for the operator “. To achieve this, it would have asked its lenders to write off part of their debts, “ i.e. a loss of around 30%.
New standoff with creditors
This announcement, one can easily imagine, would have gone down badly with Altice France’s creditors, made up mainly of speculative funds, hedge funds. They consider it hostile and some would cry blackmail. While Patrick Drahi had promised to sell assets, including a share of capital in SFR, to repay his debt, creditors fear, according to The worldwhatThe businessman uses the proceeds from the sale of data centers and BFM-TV, set aside, to pay a dividend to his personal holding companies. »
Another hypothesis: Patrick Drahi would like to reduce SFR’s debt to better sell the operator subsequently and obtain most of the profit. Recovered, several hedge funds would have joined forces and formed a united front. They reportedly hired an investment bank and law firms specializing in debt restructurings to develop an alternative proposal.
The world recalls that this is not the first time that Patrick Drahi has engaged in a standoff with his investors. “ At the end of the 2000s, when its cable operator Numéricable was going through a bad patch similar to that of SFR, it managed to renegotiate the debt at the last minute. He also fought hard with his minority shareholders during the withdrawal of Altice Europe from the Amsterdam Stock Exchange in January 2021.
SFR employees could pay the price for this degraded context. While the operator’s managers estimate that the economic situation will be as bad this year as in 2023, a downsizing of the workforce is feared after the voluntary departure plans for 2016 and 2021. Altice France has just recruited a new HR director, in the person of Hélène Leduc Fonnesu. Formerly of McDonald’s France and PSG, the latter would be preceded, according to Letter Awith a reputation as an iron lady.
XpFibre, the “cash machine”
For his part, The Echoeshe carried out an inventory of the family jewels which could be transferred. In France, XpFibre “ appears to be the most mature asset “. In 2019, Altice already sold 49.99% of this subsidiary to insurers AXA and Allianz and to the Canadian fund Omers for 1.8 billion euros. Infrastructure operator, XpFibre has deployed 6 million optical fiber sockets and covers more than 6,000 municipalities.
According to the economic newspaper, XpFibre would generate around 300 million euros in Ebitda (operating profit before provisions and depreciation) per year but and “ could double this figure in the medium term” as the end of optical fiber deployment and associated investments looms. By selling its stake in this “cash machine”, Altice would recover 4 billion euros. Also in France, the sale of Teads, a French specialist in online advertising video, would bring in around two billion euros.
The sale of La Poste Mobile could also generate new money. A 49% shareholder of the virtual operator, SFR should recover more than 480 million euros from its sale to Bouygues Telecom. Unless SFR uses its right of approval to derail the operation or its right of pre-emption to buy back La Poste’s shares. It would then be up to the operator to put some 480 million euros on the table to acquire 100% of the MVNO.
Meo, the Portuguese nugget
The hypothesis of an opening to the capital of SFR seems, on the other hand, closed. According to The echoes, discussions with other French telecom operators would have quickly reached an impasse, due to fear of a veto from the Competition Authority. Investment funds would not be inclined to take a minority stake in “ a company in difficulty and over-indebted » of which they would not control the strategy and of which they would become jointly responsible for part of the debts.
Finally, abroad, Patrick Drahi’s empire plans to sell its Portuguese nugget. The country’s leading operator, Meo is doing like a charm with turnover up 10% (2.9 billion euros) and Ebitda up 14% (1 billion euros).
According to Bloomberg, the Saudi operator Said Telecom Company (STC) – already the largest shareholder of the Spanish Telefónica -, Iliad, the parent company of Free, and a consortium led by Warburg Pincus have made offers. None, however, would match the 10 billion euros expected by Altice France.