Bland bond issue to tackle BT debt

BT may double the amount of cash it attempts to raise from shareholders in a rights issue to £10bn.

By Mark Graham, 30 April 2001 10:47

NEWS Previous indications were that the company would issue new shares worth £5bn. With Sir Christopher Bland officially replacing Sir Iain Vallance as CEO tomorrow, however, an announcement is expected to be made this week that the telco will ask shareholders for double that amount. BT desperately needs to reduce its £30bn debt mountain by a third before the end of the year in order to avoid the credit rating on its bonds being downgraded, adding millions of pounds to its already hefty interest bill. City analysts are looking for Bland to finally begin restructuring the struggling telco. Another indicator that BT is ready to take action came from Bland who suggested BT made a mistake paying billions on 3G licences. Asked if BT should have bid, Bland replied "certainly not".

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