Nordic ally adds to BT's woes

NEWS Telenor's prospectus, released this week in advance of the offering to be priced on 3 December, says the company is in discussion with BT about their interlocking holdings in Ireland, Sweden and Germany. The Norwegian company has until 7 December to exercise its option to sell BT its 49.5 per cent stake in Ersat Digifone, or to swap it for a 33 per cent stake in the Ersat Group. If they decide to sell, the price will be around £800m. Also up for grabs are the companies' 50 per cent stakes in Swedish-based fixed line operator Telenordia and Telenor's 10 per cent stake in Viag Interkom - worth around £1bn. A report in the Wall Street Journal yesterday commented that BT will be in trouble with its banks if it has to fund companies it already, in effect, controls. Matt Hanrahan, analyst at Bloor Research, said: "All the telcos are having difficulties with money and are cash weak." Both companies have admitted to the discussions, but have denied their relationship will change from the current amicable state. BT is desperate to lower the estimated £30bn that it will owe by next March and has announced a series of sell-offs to cut this by £10bn. Telenor's IPO is set to make between $2bn and $2.7bn. This is over a quarter down on earlier estimates for the sale of 21 per cent of the company.