drahi retakes the reins at altice as share price tumbles
Last Updated : GMT 06:49:16
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Last Updated : GMT 06:49:16
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Drahi retakes the reins at Altice as share price tumbles

Arab Today, arab today

Arab Today, arab today Drahi retakes the reins at Altice as share price tumbles

Altice has grown rapidly since it was founded in Luxembourg in 2001
Paris - Arab Today

French billionaire Patrick Drahi has retaken the reins at his telecoms and media group Altice (Other OTC: ATSVF - news) after its share price plunged more than a third in the week following disappointing results that renewed concerns about its towering debt.

The management shakeup late Thursday briefly halted the slide of the company's share price on the Amsterdam stock exchange, bouncing two percent higher at the open of trade on Friday but showing a fall of 1.4 percent by 0930 GMT.

Altice has grown rapidly since it was founded in Luxembourg in 2001, moving into the cable, content production, telecom, media and online video advertising sectors.

But the acquisitions, which include France's second-largest mobile firm SFR in 2014 for 17 billion euros ($19.8 billion), have been made primarily with debt. Altice spent nearly $30 billion (25.7 billion euros) in a few months in 2015 to acquire cable operators Suddenlink and Cablevision, making it the fourth-largest US cable operator.

The firm, which posted 23.6 billion euros in sales last year, had a debt of 51 billion euros at the end of September.

Altice has been able to make that business model work by aggressively cutting costs and raising revenue at his acquisitions.

But results published last week showed a 1.8 percent drop in sales in the third quarter to 5.75 billion euros due to reverses in Altice's main markets in France and the United States, although its operating profit and margin both ticked modestly higher.

SFR saw its sales slip 1.3 percent, with revenue per mobile subscriber dropping and the number of its fixed-phone clients falling, as did revenue per client due to an update of its offers.

Meanwhile, in the United States, revenues slid 2.5 percent.

Some analysts had warned Altice may have difficulty making its model work when it snapped up Cablevision in 2015.

Deutsche Bank (IOB: 0H7D.IL - news) said at the time that while Altice (Amsterdam: 28975495.AS - news) "has developed a track record of successful cost cutting", it may struggle to find targeted synergies "in the US cable market where content costs are typically more expensive than in Europe".

- Back to winning team -

The reorganisation announced late Thursday sees Drahi return to heading the board of the main Altice holding company registered in the Netherlands.

Michel Combes, who has led operations for the past two years, resigned as chief executive officer of the Dutch company as well as SFR.

A long-time Drahi loyalist, Dexter Goei, is taking over as chief executive at the Dutch company while holding onto that position in the US.

The head of SFR's media unit, Alain Weill, is taking over as director and chief executive of the group.

"This structure represents a return to the core organisation that created the success of the Altice Group," the company said in a statement announcing a reshuffle.

"The new management and governance structure is designed to better implement Altice's strategy, create clearer accountability amongst management and improve the operational and financial performance of the business," it added.

Combes said that with Drahi returning as president of the group "Altice will be well positioned to execute its strategy across all operations."

The drop in the share price may have little practical impact on the company's finance, as a measure of investor sentiment it could show that Altice might have more trouble raising money the next time it tries to make a major acquisition.

Altice has made clear it still has big ambitions and has recently reached a deal to offer mobile services in the United States using Sprint's network, realising a long desire to enter that segment as well.

Its US unit listed on Wall Street at the end of June.

Altice now has more than 26 million mobile customers in a string of countries, including France, Portugal, Israel and the Dominican Republic, according to the company.

The firm also owns media outlets Liberation, i24NEWS, BFM and RMC in France.

It employed nearly 50,000 people at the end of last year.

Source:AFP

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drahi retakes the reins at altice as share price tumbles drahi retakes the reins at altice as share price tumbles

 



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