BT board in ‘debt crisis talks’
Come on, it's only £30 billion
BT has called an emergency board meeting to discuss ways of reducing its lumbering £30 billion debt, according to the Sunday Times.
The meeting has been called following last week's tech shares crash. BT had hoped that a partial float of BT Wireless (as well as selling off non-core assets and floating part of Yell) would yield £10 billion and reduce its debt to a more acceptable level.
The Sunday Times appears to have an unusually well-placed source for its BT story, judging from the precision with which it forecasts the outcome of Tuesday's board meeting.
The board will vote to abandon the float of BT Wireless. Instead it will recommend a massive £5 billion new share issue. This move, it claims, will cause the departure of CEO Peter Bonfield - who is most to blame for BT's apparent inability to see how the telecoms market is developing. The paper also claims that new FD Phillip Hampton is after a complete demerger of BT Wireless, rather than a partial flotation, and wants to get rid of BT's 20 per cent holding in Japan Telecom.
Incredibly, the paper reckons that chairman Sir Iain Vallance is expected to survive any shake-up. In most analyst and press speculation to date, the assumption is has always been that it is Vallance's head on the
chopping block, while Bonfield gets the reprieve.
But back to the most black and white world of BT's press office. The company will not comment on whether board meetings are happening or not. It denies that the BT Wireless float is off - it will go on as scheduled before the end of the financial year.
No comment of whether Bonfield is liable to leave the company. There is no firm plan to ditch BT's holding in Japan Telecom - it is currently "happy with the 20 per cent holding". As for the £5 billion share issue, this is "rumour and speculation". BT, as ever, will "look at all the options".
Incidentally, the FT reported the same story today. It looks like it was a simple rewrite of the Sunday Times piece though, so we're still only getting the story from one side. ®
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