BT finally sells £2.4 bn in property
Contract signed yesterday
BT has finally signed the deal which will see it sell £2.4 billion worth of property and then hire it back on a lease, providing the debt-laden telco with some much-needed financial relief.
The plan to sell about 6,700 properties, including offices, telephone exchanges, vehicle depots, warehouses, call centres and computer centres was first touted in January this year as mounting debt forced BT to look at modern business practices.
And yesterday, it signed over 5.5 million square metres to Telereal - a joint venture between Land Securities Trillium and The Pears Group. The deal was struck in April - just before new debt-warrior Sir Christopher Bland was installed as new chairman.
Then, in July, the price was set for a scaled-back deal (down from 7,500 properties initially) and Telereal was left to raise the money on the bond market. Never one to miss an opportunity to tell worried investors that it is cutting debt, BT has announced the deal for the fourth time today. Although it will actually be completed on 14 December, so we may see another press release then.
BT will pay Telereal £6 per square foot a year and £190 million (increasing at three per cent a year) for the freeholds. Bland said of the deal: "This transaction is another important step in our restructuring and debt reduction programme." ®