Cable and Wireless borrows big to finance split
Cable and Wireless has today settled on the details of its long-planned split, which has been delayed by the recession.
The demerger, establishing CWI and Worldwide as separate firms, is now due to be completed by the end of March.
To ensure both new firms have enough cash to meet their debts and operate, Cable and Wireless plans a large bond issue and new loans.
It's planned the bond sale will raise £200m. A further £300m for the confusingly-named UK arm Worldwide, and $500m for the overseas arm CWI, will come from banks.
Cable and Wireless' famously-generously-remunerated top brass will remain in charge. Worldwide will be run by Jim Marsh, with John Pluthero as chairman. CWI will be run by Tony Rice with Richard Lapthorne as chairman.
The demerger follows deep cuts and job losses at Cable and Wireless which have helped the domestic and international businesses achieve profitability.
Shareholders will meet in February to approve the plan. ®