AT&T Looks to Cut Debt With Puerto Rico, Virgin Islands Sale

(Bloomberg) -- AT&T Inc. agreed to sell its operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America Ltd. for $1.95 billion in cash, taking a step toward reducing debt amassed in one of 2018's biggest merger deals.

The Dallas-based telecom and media giant has been trying to strengthen its balance sheet since taking over Time Warner Inc. last year for $85 billion. "This transaction is a result of our ongoing strategic review of our balance sheet and assets to identify opportunities for monetization," John Stephens, AT&T's chief financial officer, said in a statement.

AT&T was exploring the possible sale of the Puerto Rican operations over the summer, though it then expected to reap as much as $3 billion from the transaction, a person familiar with the matter told Bloomberg News.

"Reports that we originally sought $3 billion for these assets are not accurate," an AT&T spokeswoman said Wednesday. "That was never our expectation and that valuation wouldn't have reflected the value of the assets or the market for such assets."

AT&T is under pressure from activist shareholder Elliott Management Corp., which last month started urging divestments of some assets and other management changes. The company had already sold its stake in the Hulu streaming service and its New York offices in the debt-reduction effort, reaping a total of $3.6 billion.

What Bloomberg Intelligence Says

"The sale of AT&T's operations in Puerto Rico and the U.S. Virgin Islands will further relieve pressure on the company to delever and allow for the allocation of more free cash flow to share buybacks in 4Q."

John Butler, telecom analyst.

Click here to read the research.

In all, including Wednesday's deal and cash-flow-management steps, AT&T said it has raised a net $11 billion this year, exceeding its goal of $6 billion to $8 billion. The company reports its third-quarter earnings Oct. 23 and has an investor day scheduled for Oct. 29 to offer an update on its WarnerMedia entertainment and media strategy.

For Liberty Latin America, part of U.S. cable pioneer John Malone's global empire, the deal furthers regional expansion ambitions. The AT&T assets in the sale include cellular, landline and internet businesses. Denver-based Liberty operates in more than 20 countries around Latin America and the Caribbean.

AT&T said it plans stock buybacks in the fourth quarter, along with more debt cuts. The company's shares were modestly higher in New York trading Wednesday, having gained 31% this year through Tuesday. Liberty Latin America's class-A shares rose as much as 6.1% Wednesday.

The Wall Street Journal reported on the coming sale earlier Wednesday.

(Updates with AT&T statement on valuation in fourth paragraph.)

--With assistance from Scott Moritz.

To contact the reporter on this story: John J. Edwards III in Boston at

To contact the editors responsible for this story: Nick Turner at, John J. Edwards III, Timothy Annett

For more articles like this, please visit us at

©2019 Bloomberg L.P.


More Related News

Harley Halts Output of Electric Model Pivotal to Revival Bid
Harley Halts Output of Electric Model Pivotal to Revival Bid

(Bloomberg) -- Harley-Davidson Inc. has halted production of LiveWire, the debut electric bike it's counting on to attract new riders.The motorcycle maker recently discovered an issue during final quality checks, according to an emailed statement that doesn't provide details. Harley said it stopped production

Johnson Stumbles in Bid for Brexit Deal as EU Demands Answers
Johnson Stumbles in Bid for Brexit Deal as EU Demands Answers
  • World
  • 2019-10-14 05:43:22Z

(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Boris Johnson's attempt to secure a Brexit deal ran into trouble after the European Union warned the talks were still a long way from a breakthrough and the British prime minister's political allies distanced themselves from his plans. The pound fell. After a weekend of intensive negotiations in Brussels, the EU's chief Brexit negotiator, Michel Barnier, told a meeting of envoys on Sunday that the U.K.'s proposals for breaking the deadlock over the Irish border lacked detail and risked leaving the single market vulnerable to fraud, officials said. The unionist party that backs Johnson's minority...

Billionaires Could Face Tax Rates Up to 97.5% Under Sanders
Billionaires Could Face Tax Rates Up to 97.5% Under Sanders

(Bloomberg) -- Billionaires may have much more to fear from a Bernie Sanders presidency than they do from an Elizabeth Warren administration, according to two economists advising both candidates.That's one of the conclusions of a new interactive website developed by University of California, Berkeley professors Emmanuel Saez and Gabriel Zucman.If Sanders had his way, they calculate that the 400 richest Americans, on average, would have an effective tax rate of 97.5%. That includes not only their income, but also a wealth tax that whittles away at the family fortune.The 97.5% average effective tax rate under his plans compares with 23% now and 62% under Warren's proposals, according to the...

China Denied U.S. Lawmakers Visas Over Taiwan Visit
China Denied U.S. Lawmakers Visas Over Taiwan Visit

(Bloomberg) -- China denied entry visas to a U.S. congressional delegation, with Chinese officials telling one congressman's staff members the visas would be granted for their trip only if they canceled a stop in Taiwan.Representative Sean Patrick Maloney, a New York Democrat, said in a Wall Street Journal op-ed that the quid pro quo amounted to "visa blackmail, designed to stanch the longstanding tradition of robust U.S. congressional engagement with Taiwan."Maloney warned Beijing that "ham-handed and obtusely enforced pressure campaigns" will only "invigorate congressional support for Taiwan." He said he will be exploring ways for Congress to "reinforce U.S. support for Taiwan" in the...

Schiff Says Secret Testimony Aimed at Keeping Trump in the Dark
Schiff Says Secret Testimony Aimed at Keeping Trump in the Dark

(Bloomberg) -- House Intelligence Committee Chairman Adam Schiff defended holding testimony behind closed doors in the impeachment inquiry he's heading up against President Donald Trump, likening this phase of the investigation to a "grand jury.""We want to make sure that we meet the needs of the investigation and not give the president or his legal minions the opportunity to tailor their testimony and in some cases fabricate testimony to suit their interests," the California Democrat said Sunday on CBS's "Face the Nation."Schiff said they may call some or all of the witnesses to return to testify in public later, though that might not include the whistle-blower who triggered the...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Economy

Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.