BT urged to come clean over debt reduction

NEWS To date, BT has announced plans to float 25 per cent of the subsidiary by the end of the year. Philip Hampton, BT's new finance director, has raised the possibility of a full demerger and BT is currently saying "nothing is ruled out". BT has come under heavy fire for the lacklustre appearance of its plans and its failure to reassure the City over debt issues. BT debt is scheduled to hit £30bn by the end of March. The company has promised to reduce this by £10bn by the end of the year. City concerns have been sharpened by the relative failure of the Orange float last week in which heavily discounted share values fell at their IPO. Orange parent France Telecom saw its credit rating cut by agency Standard & Poor last Friday. Yesterday, The Sunday Times quoted Sir Peter Bonfield, BT CEO, as saying the company had paid £10bn too much for its 3G licences. Institutional investors are reportedly putting the screws on BT management to name a successor for chairman Sir Iain Vallance, due to retire in 2002.