Altice SFR France - comment

And into round X of negotiations between Altice SFR management and creditors, with reports of another offer from the Company to creditors. The devil will be in the details, but the initial view is a marginal improvement in reinstated debt, better governance in the future and an equity stake closer to 30% from the previous 18% offer. As we commented in November, the two parties were not too far apart, and a deal was likely. However, none of this changes the poor performance of the underlying asset, and going forward Altice France will remain a highly leveraged entity with poor cash conversion. We have not seen any projections from the Company to show CAPEX will finally decrease.  

Cash element remains static at €2.6bn or 13.3c of the face. Reinstated debt has increased marginally (€500m) from the previous offer, with €14.2bn or 72,6c reinstated (from the previous €13.7bn). The new credit spread has also increased by 50bps. The equity stake has increased substantially to close to 30%.