AT&T to Sell Puerto Rico and US Virgin Island assets to Liberty Latin America
In and attempt to drastically reduce its debt load AT&T Inc. has agreed to sell its Puerto Rican and U.S. Virgin Islands businesses to Liberty Latin America Ltd for $1.95 billion in cash. AT&T had hoped for a valuation closer to $3 billion for the Puerto Rican assets. Operation in Puerto Rico provides cellular, landline and internet connections to the island.
Liberty Latin America is a publicly traded telecom and cable provider that operates in Chile, Puerto Rico, the Caribbean and other countries in Latin America. Liberty is already the biggest pay-TV and broadband provider on the island. Leading shareholder John Malone and Liberty Latin America CEO Balan Nair have told investors they would like to expand in the region through disciplined mergers and acquisitions.
After AT&T’s $80 billion-plus acquisition of Time Warner last year the debt level became a concern. The company’s net debt stood above $160 billion earlier this year. The sales seems to mirror AT&T’s goal of selling noncore assets, something activist investor Elliott Management Corp. is pushing. AT&T has also sold its stake in streaming service Hulu.