Home / Business / AT&T to sell its operations in Puerto Rico and the US Virgin Islands

AT&T to sell its operations in Puerto Rico and the US Virgin Islands

AT&T Inc.

T 0.08%

have agreed to sell their Puerto Rican and US Virgin Islands businesses to

Liberty Latin America Ltd.

LILA 2.40%

for $ 1.95 billion in cash, which allows the telecommunications giant to shave off its debt load and approach repurchase shares.

AT & T's business in Puerto Rico provides mobile, landline and internet connections. It had 1

.1 million wireless subscribers. As part of the deal, approximately 1,300 AT&T employees will be transferred to Liberty Latin America.

The two companies said they expect the deal to be completed within six to nine months. Earlier Wednesday, the Wall Street Journal reported that the companies had agreed to an agreement.

Puerto Rico accounts for a small portion of AT & T's domestic operations, but throwing the device will help it reduce a large debt load accumulated through its $ 80 billion-plus acquisition of Time Warner last year.

The deal signals progress in AT & T's goal of selling non-assets, something that activist investor Elliott Management Corp., which recently disclosed a stake in the company, is also pushing. AT&T has also sold its stake in the streaming service Hulu.

On Wednesday, AT&T said the deal gives more than $ 11 billion the amount of money it will have collected from asset sales this year. The company said they expect to return to share repurchases during the fourth quarter, along with debt reduction.

Liberty is already the largest provider of pay-TV and broadband on the island. Kabeldykon

John Malone,

who has a voting share of 25.5% in Liberty Latin America and CEO of Liberty Latin America

Balan Nair

has told investors that they want to expand in the region through disciplined mergers and acquisitions.

Liberty plans to fund the cash deals to a large extent by raising debts against the combined Puerto Rican operation, said a person familiar with the matter.

AT&T originally came to Puerto Rico in 2009 after it acquired Centennial Communications Corp., a rural telecom company with a large share of the island's revenue, for under $ 1 billion.

The complexity of the Puerto Rica unit slowed down negotiations. Thousands of residents in the Commonwealth spend several months during the year on the American mainland, for example, which made it difficult to count subscribers, according to another person familiar with the matter. The island was also severely damaged in 2017 by Hurricane Maria.

Liberty Latin America is a publicly traded telecom and cable provider operating in Chile, Puerto Rico, the Caribbean and other Latin American countries. The company spun out last year

Liberty Global

the international cable operator led by Mr. Malone. The operator in Latin America currently has a market value of approximately $ 3 billion.

Write to Shalini Ramachandran at [email protected] and Drew FitzGerald at [email protected]wsj.com

Copyright © 2019 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8 [19659018]
Source link