Altice International/Altice SFR France - comment

Don’t get too excited.  Press over the weekend reports that Altice is seeking to exit its fibre JV OXG with Vodafone. Firstly, this is Altice Luxembourg SA, the holding Company of Altice International Sarl and Altice France Holding SA, so outside the restricted group of both bond stacks. Secondly, and more importantly, it would appear at first glance that Altice is exiting a funding requirement.  Further details are below, but Altice initially paid €120m for its share in the JV with significant funding obligations (€950m before end of the decade) for the roll-out strategy.  Any cash proceeds will be minimal.

Altice Luxembourg paid €120m to acquire 50% at closing in FY23, with an additional €487m to be paid depending on roll-out (starting when 1.5m homes have been passed). An earn-out of up to €595m based on performance brought the headline up to €1.2bn. Per Vodafone’s March 2024 accounts, each shareholder is committed to contributing up to €950m for the roll-out strategy, but for the year ending March 2024 Vodafone provided €32m with the balance expected to be contributed between 2024 and 2029. We imagine that will be the same for Altice.