BT gets £4.8 billion for telecoms stakes
Share price jumps but Bonfield refuses to talk strategy
BT announced this morning that it is to get £4.8 billion for its shares in Japan Telecom, J-Phone and Airtel. The sale to Vodafone will make more money than expected and help take a chunk out of BT's £30 billion debt.
The shares in Japan Telecom and J-Phone (its wireless arm) will go for £3.7 billion and the Airtel shares for the remaining £1.1 billion. BT CEO Sir Peter Bonfield said: "This deal gives us fantastic returns. In Japan [we have received] three times our original investment, making a profit of £2 billion in less than five years and Spain five times the original investment in six years. This is a very, very good return for our shareholders."
The City agrees and BT shares have jumped 2.3 per cent this morning to 599.50p (at one point hitting 608p).
Bonfield refused to talk about the beleaguered company's future strategy however, including the widely anticipated £5 billion to £10 billion rights issue.
To pay for the shares, Vodafone has asked the markets for £3 billion. This may make it harder for BT to ask for a larger sum in the immediate future.
New chairman Sir Christopher Bland took over as chairman yesterday. Sir Bland is due to get £500,000 a year for a three-day week at BT. With share options and perks added in, he could be looking at £4.5 million over three years. Nice work if you can get it. ®