AT&T seeks to raise $1.98 billion from Cablevision stake

Company needs funds

`nothing is sacred'

April 10, 2001|By BLOOMBERG NEWS

WASHINGTON - AT&T Corp. said yesterday that it is endeavoring to sell a $1.98 billion stake in Cablevision Systems Corp., the New York City area's largest cable-television provider, as it moves to pay down debt.

AT&T wants to register 30 million Cablevision shares, valued at $1.98 billion based on Friday's close, for possible sale, it said in a U.S. Securities and Exchange Commission filing. AT&T now owns 48.9 million Cablevision Class A common shares, giving it a roughly one-third stake in the Bethpage, N.Y.-based company.

The biggest U.S. long-distance telephone and cable provider is selling stakes in other companies and using the proceeds to reduce its debt, which soared 81 percent last year to $65 billion.

AT&T pared its debt to $46 billion in January and agreed in February to sell another $5.35 billion in assets.

"They are so desperate to raise funds," said Brian Bruce, director of global investments at Panagora Asset Management in Boston, which owns AT&T shares. "Nothing is sacred at this point."

Cablevision shares fell $1.60 to $64.50 yesterday. AT&T rose 30 cents to $20.80.

AT&T is preparing to split into three companies, including its Broadband cable unit, and to issue shares in another by next year to boost its lagging stock price.

Since the break-up was announced in October, AT&T has agreed to sell stakes in Japan Telecom Co. and AT&T Wireless Group, and has sold cable systems with 1.4 million customers.

The company got its Cablevision stake in 1999 from Tele-Communications Inc., the cable operator run by John Malone that AT&T bought for $59.4 billion.

"AT&T is working to get their balance sheet right," said Mike Binger, a fund manager with Lutheran Brotherhood Inc., which owns Cablevision shares. "It doesn't surprise me that everything they have is for sale."

Cablevision is controlled by the family of Chairman Charles Dolan, who sold the company's cable systems outside New York, where it owns the National Hockey League and National Basketball Association teams. The company has about 3 million cable subscribers.

"AT&T is also evaluating a direct or indirect disposition of all or a portion of its shares in" Cablevision, AT&T said in the SEC filing. "Any disposition would be dependent on market conditions, AT&T's own business opportunities and liquidity goals and other factors."

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