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Home / Business / AT&T, which pays $ 158 billion in debt, to sell Puerto Rico network for $ 2 billion

AT&T, which pays $ 158 billion in debt, to sell Puerto Rico network for $ 2 billion



  An AT&T sign on the outside of a building.
Enlarge / An AT&T sign outside a New York City corporate office.

AT&T has agreed to sell its $ 1.95 billion wireless and cable networks in Puerto Rico and the US Virgin Islands to Liberty Latin America. The agreement will help AT&T pay a small portion of the debt burden created in part by the acquisition of DirecTV and Time Warner Inc.

AT&T announced the agreement today, saying that the transaction requires review by the Federal Communications Commission and Department of Justice. AT&T hopes to complete the sale within six to nine months. "This transaction is a result of our ongoing strategic review of our balance sheet and assets to identify revenue generation opportunities," said AT&T CFO John Stephens.

AT&T has stated its intention to cut its debt by up to $ 20 billion in 201

9. The company has already lowered its long-term debt from $ 166 billion as of December 31, 2018 to $ 158 billion on June 30, 2019. AT&T asked Investors today expect share repurchases later this year, as the company continues to improve its debt-earnings ratios. AT&T said it was well on track to reach its target of a net debt-to-adjusted EBITDA ratio in the 2.5X range by year-end, down from today's 2.7X. AT & T's adjusted EBITDA was $ 29.8 billion for the first six months of 2019, a pace of nearly $ 60 billion for the year.

AT&T previously "sold its stake in Hulu power services for $ 1.43 billion and WarnerMedia's Manhattan offices at Hudson Yards for about $ 2.2 billion," a Reuters story said.

For Liberty, buying AT & T's network in Puerto Rico and the US Virgin Islands will help it dominate the communications industry in the islands. The deal will provide Liberty with a consumer mobile network and a fiber backhaul business.

"Liberty is already the largest provider of pay-TV and broadband on the island [of Puerto Rico]," the Wall Street Journal wrote today. "Cable tycoon John Malone, who has a 25.5% stake in Liberty Latin America, and Liberty Latin America CEO Balan Nair have told investors they want to expand in the region through disciplined mergers and acquisitions."

Sales from AT&T to Liberty include "spectrum; real estate and leases; customers, including 1.1 million wireless subscribers, and contracts," AT&T said.

AT&T has operated in Puerto Rico since 2009, when it acquired Centennial Communications Corp. for almost $ 1 billion. AT&T said the sale will not affect the development of FirstNet, a US-wide public safety network it builds under a contract with the US government.

AT&T said:

Among other services, post-close Liberty Latin America will support AT&T's FirstNet construction in Puerto Rico and the US Virgin Islands, expanding LTE coverage and capacity to best meet the needs of the first the respondents in the region. Qualified first responders who subscribe to AT & T's FirstNet services in Puerto Rico and the US Virgin Islands will continue to have access to the benefits and opportunities of the FirstNet network platform, including priority and preview.

Mobile customers transferred from AT&T to Liberty "will continue to benefit from free roaming services between Puerto Rico, the US Virgin Islands and the mainland of the United States, Mexico and Canada," Liberty said.

AT&T said it will also continue to operate DirecTV on the islands.


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