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C&W plans £200m debt for group split
18 November 2009
Cable & Wireless is to raise funds to help pay for the planned split of the group into two operations by March 2010
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Comment: It’s been talked of for a long time but the financial markets are finally favouring C&W’s long-held plan to split the company into what are essentially different operations. It’s probably an opportunity, though, for someone to step in and make an offer or two
Cable & Wireless is planning to raise £200 million for its UK unit. The group will use £1.1 billion of the new debt financing and cash facilities for the split of its two businesses, CWI and Worldwide.
C&W is also in advanced talks with banks about a three-year £300 million facility for Worldwide and a three-year $500 million facility for CWI.
C&W Worldwide is the company’s name for its largely UK-based operation, mainly formed from its takeover of Energis in late 2005, bringing John Pluthero into the combined group. Pluthero will chair the Worldwide arm.
CWI — the “I” for international — owns fixed and mobile operations in the Caribbean and other parts of the world.
It will issue £200 million in convertible bonds. Barclays, BNP Paribas and RBS Hoare Govett are acting as bookrunners on the deal.
C&W is preparing to split off the subsidiary on the London Stock Exchange in March 2010. The group is also negotiating with its pension trustees to divide its pension fund between the two units.
C&W had initially planned to demerge the businesses in 2008 but delayed the plans, partly due to the difficulty in arranging debt facilities for the UK business. GTB