Patrick Drahi Says Altice France’s BFM TV & RMC Networks Not For Sale As He Sets Out Debt Reduction Plan

Telecoms tycoon Patrick Drahi told an earnings call for Altice France on Tuesday his main priority for the subsidiary was to reduce its $26 billion debt but the sale of its media assets – comprising the BFM TV and RMC TV and radio networks – was not on the cards.

In a rare move for the Israeli-French billionaire, Drahi was talking directly to analysts for the second time this week as he attempts to calm market jitters sparked by a corruption probe involving Altice Portugal and Drahi’s long-term business associate Armando Pereira.

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The revelation has prompted closer scrutiny of the entire Altice parent group – spanning Altice International, Altice France and a stake in Altice US.

As well as raising questions about the governance of the group, some market commentators suggest the affair will impact its options for servicing its estimated combined $60 billion worth of debt.

Second quarter results for Altice France – grouping telecom giant SFR, Altice Media (BFMTV and RMC) and a 50% stake in fiber optics company XpFibre – showed a 2.6% decline in revenue year-on-year to $3 billion (2.77 billion euros) and a 5.7% decline in EBITDA to $1.12 billion (1.02 billion euros).

Drahi said his “single priority for today” for Altice France was to deleverage and strengthen its capital structure, with a leverage target of 4.5 times net debt to EBITDA, against 6.3 at the end of June.

He added that many of his long-term lenders had experience of him dealing with and finding solutions for similarly complex debt situations in the past.

Drahi detailed a four-pronged debt reduction strategy, comprising the empowerment of local management, the sale of non-core assets, buying back debt and “contributing equity and implementing actions on the M&A front”.

Quizzed by one of the analysts on the call over whether Altice France was planning a sell-off its media assets, Drahi said this was not on the cards.

“The media business is not for sale,” he said.

“Although we’ve been approached by a number of people, this business is not for sale… we are open to a discussion on anything but this is not our core reflection at the moment and this is not what will bring the leverage down to where we want to bring it,” he said.

Altice is instead exploring options for the sale of its data centers in France and Portugal, although ongoing talks have been slowed by the Portuguese corruption probe.

As with Monday’s call, Drahi sought to distance himself from Pereira and reiterated that Altice operations outside of Portugal had been only marginally touched by the allegedly corrupt activities.

He noted that while Pereira had played a major role in the growth of business up until 2019, at the time of his arrest he was coming to the end of a one-year advisory role supporting incoming SFR CEO Mathieu Cocq.

In Monday’s call, Drahi expressed his “shock” and “disappointment” on being informed of the probe. Without naming Pereira, he said that if the allegations were found to be correct, he would feel “betrayed”.

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