Patrick Drahi, owner of Altice and SFR, is seeking to reduce the operator’s debt by asking its lenders to waive part of their debts. The approach is seen as a provocation by the latter.
The worlds of telecoms and finance hold their breath as Patrick Drahi, the telecoms magnate, desperately seeks to overhaul the gargantuan debt of his Altice France empire, owner of SFR, estimated at 24.3 billion euros. This precarious situation encourages the businessman to request debt reduction from lenders. Except that the gesture was received with indignation and is described as “blackmail” by the latter. Patrick Drahi finds himself back against the wall.
For Altice and its astronomical debt, restructuring is taking place under tension
The signals sent by Altice are anything but good at the moment. From the end of the promotional period offered to SFR landline customers to the catastrophic results of the operator in the red square, which still lost hundreds of thousands of subscribers last year, times are tough.
Last week, Altice France also launched a debt restructuring operation, debt deemed unsustainable while SFR has been suffering this hemorrhage of customers for more than a year and a half. To ensure a more stable future for the operator, Altice considers it necessary to reduce debt to around 16 billion euros, a reduction of 8 billion compared to the current level.
However, Altice’s proposal includes a condition that sparked an outcry among lenders: they would have to give up a portion of their debts, around 30%. The effort, or rather the requirement, was seen as a provocation, with lenders feeling held hostage in this untenable situation.
Among SFR creditors, resistance is organized
The creditors, who are mainly funds specializing in risky debt, reacted with firmness, even hostility, to Patrick Drahi’s request. Several of them joined forces by hiring financial and legal experts to develop a resistance strategy. They are said to be determined not to give in to pressure from Altice and determined to defend their interests.
This financial battle only adds to the uncertainty at SFR. While the operator’s managers anticipate a year 2024 as difficult as the previous one, employees fear new consequences and changes, especially after the arrival of new members of management.
This fight for the financial survival of SFR raises crucial questions about the future of the operator and its owner, Patrick Drahi. If the billionaire has succeeded in the past in negotiating complex agreements to overcome similar crises (like that of Numéricable), the outcome here is uncertain. And it is not the sales of shares in La Poste Mobile (around 1 billion euros) and the Altice Média branch (BFMTV and RMC) (around 1.55 billion euros) which will appease the creditors.
Source : The world
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