AT&T continued to dump peripheral assets as part of an ongoing debt reduction scheme, selling its stake in entertainment company Central European Media Enterprises (CME) to investment company PPF Group for $1.1 billion.
In addition to generating cash, the operator said the sale removes its obligation to act as a backstop for $575 million in CME debt in the event of a default.
AT&T was the largest CME shareholder, having inherited its stake through its Time Warner acquisition in 2018. It noted the sale is part of an ongoing effort to divest peripheral assets and use the funds to pay down debt.
The CME deal was one of several AT&T set up in 2019, alongside agreements covering sales of network assets in the Caribbean and a minority stake in US streaming service Hulu.
MoffettNathanson analysts said in a research note AT&T’s efforts to cut debt could play a critical role in its ability to participate in a key mid-band spectrum auction set to begin in December. They stated it “needs more mid-band spectrum to keep pace” with rivals T-Mobile US and Verizon on 5G, but “it simply isn’t clear where AT&T will find the borrowing capacity to buy a competitive-sized block of spectrum”.Subscribe to our daily newsletter Back