AT&T Inc. (NYSE:T) is sitting on a debt pile of $166 billion at the beginning of 2019. The company initiated several measures to clear part of the debt. It has announced the sale of Central European Media Enterprises Ltd. of Warner Group to PPF Group NV, an investment firm based in the Czech Republic. The all-cash deal is valued at $1.1 billion. As part of the agreement, the company would also receive a debt guarantee of $575 million. AT&T hopes to complete this deal in Q2 2020.
AT&T sells wireline optimization
Previously AT&T also planned to divest fiber networks and wireless networks in the US Virgin Islands and Puerto Rico for an all-cash deal of $1.95 billion to Liberty Latin America. The company will use the proceeds to pay off a small portion of the debt it accrued through the takeover of Time Warner Inc and DirecTV. The deal is subject to the review of the Department of Justice and the Federal Communications Commission.
AT&T is optimistic about completing the sale in the next nine months. The acquisition helps Liberty to maintain leadership in the communications industry on the Islands. Liberty is a significant player in the broadband and Pay TV in Puerto Rico. Chief Executive Officer of Liberty Latin America, Balan Nair, and John Malone, the cable tycoon, said the company plans to expand its footprint in the region through disciplined acquisitions and mergers. Liberty would receive contracts and 1.1 million subscribers from a deal with AT&T. AT&T recently mobilized funds of $1.43 billion by selling 9.5% Hulu back to that company and paid off the debt.
Paying off debt is a top priority
Chief Executive Officer and Chairman of AT&T, Randall Stephenson, said the company’s priority is to reduce debt. As part of that goal, the company also contemplates selling AT&T Sports Nets. AT&T reduced the debt to $158 billion in June 2019 from $166 billion at the end of December 2018. Its main aim is to reduce the debt this year by up to $20 billion. In a communication to the investors, AT&T said it would consider buybacks later this year on improving the ratio of debt to earnings.