France’s Vivendi has described a report that it is considering splitting off local telco SFR as “highly speculative”.
Bloomberg reported that the media and telecoms conglomerate is considering separating SFR and transferring debt to the telco so…
France’s Vivendi has described a report that it is considering splitting off local telco SFR as “highly speculative”.
Bloomberg reported that the media and telecoms conglomerate is considering separating SFR and transferring debt to the telco so it can focus on its media operations. According to the report, which cited unnamed sources with knowledge of the discussions, the talks have become more serious following a February board meeting, but a final decision has not yet been taken.
A Vivendi spokesperson told TelecomFinance the company stands by its earlier declaration that SFR, which generated almost 40% of the groups’ 2012 revenue, is not for sale. He reiterated that Vivendi aims to maximise the telco’s value this year by stabilising operations, boosting growth and studying possible partnerships, adding that speculation beyond this is “too premature”.
“We want to deploy a productive commercial strategy [for SFR],” he said, noting that this will require a change in capital structure.
In August last year Vivendi CFO Philippe Capron noted that a separation of the different units would be complicated by the debt structure of the company. “Clearly a break-up of the company would lead to very, very great difficulties in terms of apportionment of debt, and we do not see the possibility to retain a quality rating on the two remaining entities,” he said on a call at the time. “Therefore a straight break-up, for the time being, is not something we contemplate.”
The recent Bloomberg report cited sources as saying a separation of SFR from the parent group would take three to five years to complete. In the meantime, Vivendi might find a buyer for GVT or SFR, they added.
The Vivendi spokesperson also reiterated Capron’s contention last month that the company is under no time pressure to sell assets, noting that its credit rating is confirmed at BBB.
Vivendi commenced a strategic review of its operations last year and chairman Jean-Rene Fourtou has said there are “no taboos” on how the company should go about it. The company confirmed sales processes for its two other telcos – GVT in Brazil and Maroc Telecom in Morocco – but has denied SFR is for sale.
The sale of GVT was suspended earlier this month after US satellite broadcaster DirecTV pulled out of the process, but the sale of the Moroccan unit, valued at about US$6bn, is ongoing.
Vivendi posted revenues of €28.9bn for 2012, of which the telcos contributed €15.7bn. The group’s EBITA stood at €5.28bn, while net debt totalled €13.4bn.
Vivendi is set to hold its AGM at the end of April.
