Portugal Telecom (PT) plans to launch a public bond offering of at least €250m as part of a new, more prudent strategy to improve the company’s financial position.
The Lisbon-based telco said its board of directors has approved the launch of the…
Portugal Telecom (PT) plans to launch a public bond offering of at least €250m as part of a new, more prudent strategy to improve the company’s financial position.
The Lisbon-based telco said its board of directors has approved the launch of the offering in the Portuguese market, to be called ‘PT Fixed Rate Bonds 2012/2016’. The initial offer size will be €250m, although this may be increased during the offer period, the company said in a statement. The bonds will have a four-year term and a fixed interest rate of 6.25%, to be paid semi-annually.
The new strategy is designed to increase the company’s financial flexibility by reducing its debt and improving its debt maturity profile. PT also said it is now refinanced until the end of 2015. It will also work to reduce leverage so it is better placed to invest in business development.
The board has also approved a €200m three-year share buyback programme for the 2012-2014 fiscal years and an annual cash dividend of €0.32 per share for the same period. The dividend is half of that originally intended, although PT said the share buyback programme affords an extra €0.225 per outstanding share.
The share buyback programme and cash dividend are subject to numerous conditions, including the market environment, PT’s finances and legal and other issues.
“Therefore, the necessary authorisations and social deliberations will be proposed in due time as these conditions are verified,” the company stated.
PT said that, while its board is confident about the company’s cash flow, it decided a new strategy that substantially reduces financial risks is needed in light of current macroeconomic and market conditions.
“As a result of these measures, PT has maintained its commitment to preserving an attractive shareholder remuneration policy combined with a more prudent deleveraging and debt maturity profile.”
