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During the 2001 financial
year, the group has increased its level of borrowings so that its net debt was
£28 billion at 31 March 2001 and £29 billion at the end of April 2001. We have
stated our intention to reduce net debt in Future BT to between £15 billion and
£20 billion by 31 March 2002. This debt reduction is dependent on our being
successful in completing our rights issue and the sales of investments already
announced. If we are unsuccessful in our plans either in part or in whole,
there is a risk that our credit rating will be further downgraded and if this
happens we may lose some financial flexibility in our ability to raise
short-term finance for our operational needs.
The directors have a
reasonable expectation that the group has adequate resources to continue in
operational existence for the foreseeable future and therefore they continue to
adopt the going-concern basis in preparing the financial statements.
There has been no
significant change in the financial or trading position of the group since 31
March 2001, other than the announcement of the rights issue and the planned
Japanese and other investment disposals described above, and the completion of
the Esat Digifone minority interest purchase in April 2001.
At 31 March 2001, the group
had cash and short-term investments of £2,969 million. At that date, £11,629
million of short-term debt was outstanding, comprising principally £3,494
million of borrowings under BT’s commercial paper programmes and £7,094 million
under its medium-term note programme. In addition, the group had unused
committed short-term bank facilities, amounting to approximately £16,750
million at 31 March 2001, in support of a commercial paper programme or other
borrowings. The group also has £460 million of uncommitted short-term bank
facilities.
At 31 March 2000, the group
had cash and short-term investments of £2,304 million. At that date, £5,121
million of short-term debt was outstanding. In addition, the group had unused
committed short-term bank facilities, amounting to approximately £5,800 million
at 31 March 2000.
The increase in short-term
borrowings in the 2001 financial year was required to finance, in part, BT’s
acquisitions of third-generation mobile licences and investments during the
year. |
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