(Bloomberg) -- Altice France, the embattled telecommunications firm that is in negotiations for a debt restructuring, saw a drop in earnings in the third quarter, dragged by its business services and mobile divisions.
The company’s earnings before interest, taxes, depreciation and amortization was €879 million ($929 million) for the three months through September, a decline of 9.9% from the same period in 2023, the company said in a statement Wednesday. Revenue of €2.5 billion was down 4.7%.
Reported net debt was €23.7 billion. The figure takes into account the sale of its 49% stake in mobile operator La Poste Telecom to Bouygues Telecom, for which the company will cash in €533 million when the transaction closes and a deferred payment in January of €51 million, Altice said. Net leverage was 6.8 times earnings for the previous 12 months at the end of the period.
Altice France continued to lose subscribers, with 106,000 less mobile subscribers compared to last quarter, and 53,000 less fixed customers overall, despite winning 66,000 fibre customers.
The French company told creditors in March that they would have to take losses to help it reach a new leverage target of below four-times earnings. The firm hasn’t yet managed to strike a deal with creditors on how to restructure the debt, but there have been some signs of progress over the past month.
Debt Proposals
Among the sticking points were the cost of debt and the amount of equity the company’s billionaire owner Patrick Drahi should hand to creditors, Altice disclosed on Nov. 15.
In its latest proposal, Altice suggested swapping its secured debt for a €2.6 billion cash payment, plus €13.7 billion of new secured debt instruments — with maturities ranging from 2029 to 2031 — and an aggregate equity stake of 18% in common shares. The debt was expected to have a weighted average cost of 6.5% across relevant instruments.
Meanwhile, the creditors’ latest counteroffer included the same cash payment, alongside €14.4 billion of secured debt with an average cost of 7.5% on certain instruments, and an equity stake of 34%, according to the statement.
The company counts on more than €3.5 billion in cash from asset disposals and a dividend recap from French cable company XpFibre that it could use as part of the negotiations.
Discrepancies among creditors about how to share the burden of the restructuring also made the negotiations more complex, given not just the different maturities involved but also the varying interest paid by the different debt instruments.
Management didn’t take any questions during an investor call on Wednesday, in line with the last two earnings events.
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