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AT&T looks to cut debt with Puerto Rico, Virgin Islands sale
[BOSTON] AT&T Inc agreed to sell its operations in Puerto Rico and the US Virgin Islands to Liberty Latin America Ltd for US$1.95 billion in cash, taking a step toward reducing its debt load.
The Dallas-based telecom and media giant has been trying to strengthen its balance sheet since taking over Time Warner Inc last year for US$85 billion. AT&T was exploring the possible sale of the Puerto Rican operations over the summer, though it then expected to reap as much as US$3 billion from the sale, a person familiar with the matter told Bloomberg News.
"This transaction is a result of our ongoing strategic review of our balance sheet and assets to identify opportunities for monetization," John Stephens, AT&T's chief financial officer, said in a statement.
AT&T is under pressure from activist shareholder Elliott Management Corp, which last month started urging divestments of some assets and other management changes. The company had already sold its stake in the Hulu streaming service and its New York offices in the debt-reduction effort.
In all, including Wednesday's deal, AT&T said it has sold US$11 billion in assets this year, exceeding its goal of US$6 billion to US$8 billion.
For Liberty Latin America, part of US cable pioneer John Malone's global empire, the deal furthers regional expansion ambitions. The Denver-based company operates in more than 20 countries around Latin America and the Caribbean.
AT&T said it plans stock buybacks in the fourth quarter, along with more debt cuts.
The Wall Street Journal reported on the coming sale earlier Wednesday.