Patrick Drahi’s fire-sale heats up
Media giant goes into fire-sale mode
Patrick Drahi’s French media conglomerate Altice is on the defensive, as it stares down $60bn of debt and attempts to fend off angry creditors.
On Monday, Altice unveiled its latest bid for cash: it intends to sell its 24.5 per cent stake in UK telecommunications company BT Group to Indian billionaire Sunil Bharti Mittal.
Over the past decade, Altice sprang from relative obscurity into a global media giant, supercharged by cheap debt during an era of rock-bottom interest rates.
But now, stubbornly high rates and a criminal probe into one of the company’s founders are weighing on it. As a result, Drahi is facing pressure to sell assets to reduce the colossal debt pile he amassed during the cheap money era.
The BT stake is the latest in a number of recent attempts to raise cash. In March, Altice sold a news channel and a radio station to shipping magnate Rodolphe Saadé. And last week, Drahi partnered with Abu Dhabi-based sovereign wealth fund ADQ to give a $1bn capital injection to auction house Sotheby’s.
Despite the recent rally in BT shares (including an 8.4 per cent jump on Monday), the investment in the former UK telecoms monopoly had resulted in losses for Altice, according to a person familiar with the matter.
Altice first took a stake in BT in 2021, acquiring a 12 per cent holding that it later increased to 24.5 per cent. Altice borrowed heavily from banks to build the stake, which has dropped about £1bn in value since it was disclosed, according to FT calculations.
Sotheby’s has also proved a sore spot. Its parent company had $3.5bn in long-term debt as of the end of last year, made up of loans stemming from Drahi’s 2019 buyout and mortgages he took out against its trophy properties.
Earlier this summer, S&P Global Ratings cut the auction house’s credit rating to B minus from B, citing “pressured profitability and continued ebitda decline”.
Yet spectators are still waiting for an opening salvo between Drahi’s empire and its biggest creditors. Bondholders for the company’s French telecoms business banded together earlier this year after management warned they could expect writedowns on their debt.
DD’s still waiting for that fight to break out into the open.