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February 29, 2008 |
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CABLE & WIRELESS: CitiGroup Seeks Demerger of Two Businesses Citigroup's telecoms team is urging Cable & Wireless Plc to demerge its UK and international divisions, declaring it will take a "dim view" of the company if it decides otherwise, Dominic White writes for the Daily Telegraph. According to the report, Cable & Wireless, which is preparing for an investor day next week, is contemplating a demerger. However, Michael Williams, an analyst at Citigroup, noted the telecoms company's management may opt to maintain the combined group structure instead after a successful turnaround of the UK business, whose GBP2 billion revenue and GBP400 million underlying earnings target the Daily Telegraph says are crucial to its ability to operate as a standalone business. "We call on management to confirm its plans in this respect on or before the H1 results in November 2008," Mr. Williams told the paper. Headquartered in London, Cable & Wireless Plc -- http://www.cw.com/new/ -- operates through two standalone business units –- International and Europe, Asia & US. The International business unit operates integrated telecommunications companies in 33 countries offering mobile, broadband, domestic and international fixed line services to residential and business customers, with principal operations in the Caribbean, Panama, Macau, Monaco and the Channel Islands. The Europe, Asia & U.S. business unit provides enterprise and carrier solutions to the largest users of telecoms services across the U.K., U.S., continental Europe and Asia -- and wholesale broadband services in the U.K. * * * As of Feb. 12, 2008, Cable & Wireless Plc carries a Ba3 long- term corporate family rating, a B1 senior unsecured debt rating and a Ba3 probability of default rating from Moody's, which said the outlook is stable. The company also carries a BB- long-term local and foreign issuer credit ratings from Standard & Poor's, which said the outlook is stable. S&P rates its short-term local and foreign issuer credit at B. |
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