AT&T, the US’ second-largest telco, is reportedly selling US$2bn worth of data centres to reduce debt levels and fund recent acquisitions.
The company has hired an unnamed financial adviser to assist in the sale, people familiar with the matter told…
AT&T, the US’ second-largest telco, is reportedly selling US$2bn worth of data centres to reduce debt levels and fund recent acquisitions.
The company has hired an unnamed financial adviser to assist in the sale, people familiar with the matter told Reuters.
AT&T declined to comment.
Last week, the carrier scooped up 251 spectrum licences worth US$18.2bn in major urban areas, becoming the highest bidder in the country’s recently completed AWS-3 auction.
Payments for the licences are due in the coming weeks.
Larger rival Verizon Communications, which spent US$10.4bn in the tender, is also reportedly looking to dispose of non-core assets, such as mobile towers and parts of its fixed-line business, to pay down debt and finance spectrum acquisitions. A deal could be announced later this week, according to a Wall Street Journal report citing people familiar with the matter.
AT&T already divested US$2bn worth of assets last year to local triple-play operator Frontier Communications. These included AT&T’s wireline business, state-wide fibre network, and U-verse operations in Connecticut. As part of the deal, Frontier also acquired the company’s Dish satellite TV customers in the state.
The deal-hungry carrier has rolled out an aggressive acquisition strategy in recent months to ramp up its presence in Mexico.
In January, it acquired Nextel Mexico, the local unit of bankrupt US telecoms group NII Holdings, for US$1.87bn. AT&T plans to merge it with the country’s third-largest player, Iusacell, which it recently bought from Grupo Salinas for US$2.5bn.
The Texas-based carrier is also awaiting regulatory approval for the takeover of pan-American DTH operator DirecTV, which holds a 41.3% stake in Sky Mexico.
On Friday, the telco said its spending would likely push the group over its 1.8x net-debt-to-EBITDA target in the near term.
“The company will use excess cash – after paying its dividend – over the next three years to pay down debt, and expects to return to historical debt ratios,” it said in a statement.
The company issued a US$2.62bn bond last month which will be listed on Taiwan’s stock exchange. It also secured two loan credit agreements worth a total US$11.2bn to fund acquisitions.
AT&T total debt stood at US$82.1bn as of 31 December 2014.
