France Telecom has sold its indirect interests in Telecom Argentina to W de Argentina, an affiliate of the Los W group, an Argentinean investment company for a consideration in cash of US$125 million.
France Telecom and Telecom Italia each hold approximately 34% of voting rights and a 25.5% economic interest in Nortel Inversora ("Nortel"), the holding company which owns 54.7% of Telecom Argentina's share capital. Prior to the sale, it is agreed that France Telecom and Telecom Italia will contribute their stakes in Nortel to a company created for this purpose, co-owned on a 50-50 basis by France Telecom and Telecom Italia. France Telecom will then sell 48% of this company's stock to W de Argentina, alongside with an option for the purchase of the remaining 2%. The option is exercisable by W de Argentina at any time between January 31, 2008 and December 31, 2013.
By selling its stake in Argentina, France Telecom is carrying out the assets rationalization strategy announced on December 5, 2002. This strategy involves analyzing the Group's assets outside France and the United Kingdom, based on strategic and financial criteria.
Having left Argentina, France Telecom resolved to divest from CTE Salvador. Despite its profitability, this asset remains isolated from the Group's other assets in Latin America.
Telecom Argentina operates a GSM network under the Telecom Personal brand name.
As of June 2003, the book value of Telecom Argentina's net worth amounted to US$752 million. The company's financial debt and cash position however, were US$3,176 million and US$485 million, respectively. Telecom Argentina and its financial advisor are currently developing a proposal to restructure the financial debt."
Posted to the site on 15th September 2003
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