Faced with the increase in rates, Patrick Drahi’s group reflects on several options to lighten the weight of its 31 billion euros in debt.
By Olivier PINAUD
In June 2016, in front of the senators, Patrick Drahi said he was better sleeping with his 50 billion euros in debt than with the 50,000 euros in his beginnings. The rise in interest rates observed for several months could, despite everything, disturb the nights of the owner of Altice. His French company, composed of the SFR telecoms operator and the RMC and BFM-TV media, still carries 23.3 billion euros in net debt. By adding that of international assets (Portugal, Israel and Dominican Republic), housed at Altice International, the burden exceeds 31 billion. Some more interest rate points and they are therefore hundreds of additional millions of euros to pay each year.
Altice puts the incidence of rates on its finances: more than 90 % of SFR debt is at a fixed rate, recalled Malo Corbin, the group’s financial director, during the presentation of quarterly results to Financial analysts, November 22. But the share of fixed rates will fall between 80 % and 85 % in 2023.
Result, annual financial charges will increase by 80 million euros in 2023, quantified Altice France. Faced with this additional cost, the management displays the group’s significant liquidity (1.2 billion euros on September 30). She also points out that investments are called upon to decrease in the next three years, both in the telecoms and in the media.
The marriage between TF1 and M6 having fallen into the water, Altice will not ultimately buy the TFX and 6ter channels, which will prevent her from spending the planned 150 million euros. Above all, insists the group, he has no borrowing to reimburse before 2025, which gives him time to see coming before having to take out new credits at potentially higher rates. “There is no alert on the debt,” said Altice.
Selling data centers
Sign that not everyone sleeps completely on their two ears, a large part of the analysts’ questions focused on this subject. The debt represents 5.4 times the gross operating result of Altice France, and Malo Corbin recognized that there remains a “long path to go” before making it fall to the objective of 4.5 times. He unchanged, this would require more than 3 billion euros in deleveraging to reach this target. Ambitious.
Consequence, to achieve this, the financial director has confirmed to think about selling the data centers (data centers) of SFR, a Project revealed in mid-November by the Site Informed . This activity, for which the operator says number two in France, “arouses a strong appetite at the moment, and we are receiving many requests from financial investors (…). We will see if it makes sense for us to make a transaction, “said Malo Corbin, promising that” this money will be used to accelerate delevert “.
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