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We announced in April 2000
that we would restructure our operations, by separating the UK fixed-network
business into two businesses and forming four new international businesses to
operate and manage BT’s broadband, internet, wireless and directories
businesses. The four international businesses, BT Wireless, BT Ignite,
BTopenworld and Yell began operations on 1 July 2000. The BT Wholesale and BT
Retail businesses were formed in October 2000.
In November 2000, we
announced an intention to sell public minority stakes in some of BT’s
international businesses and to dispose of non-core holdings. We also stated
that we expected to reduce our net borrowings from a peak of approximately £30
billion by around £10 billion. Certain of the restructuring steps have been
changed to reflect developments in the capital markets. As noted above, we
intend to demerge BT Wireless towards the end of 2001 and to demerge or sell
Yell.
The financial impact of these proposals are illustrated in the pro
forma statements in this document.
BT Wireless comprises the
group’s controlled mobile activities in the UK, Germany, Ireland and The Netherlands,
and the Genie mobile internet business. The group’s minority interests in
wireless companies are held centrally pending clarification of their future
within the BT group. The financial information on BT Wireless and the other
international businesses for the 2001 financial year reflects this composition.
On 2 May 2001, we announced
that we had agreed to sell our interests in Japan Telecom and J-Phones to
Vodafone at a value of £3.7 billion and our interest in Airtel in Spain also to
Vodafone for £1.1 billion. The overall impact of the combined transaction will
be a net reduction in total BT group debt of £4.4 billion. Completion of the
transactions is conditional upon relevant regulatory and procedural approvals
in Europe and Japan.
We also announced, on 4 May
2001, that we had agreed in principle to sell our interest in Maxis
Communications in Malaysia for £350 million. This transaction is also subject
to regulatory and other approvals.
On 10 May 2001, we
announced a rights issue, proposed to raise approximately £5.9 billion, net of
expenses, of up to 1,976 million new BT shares at a price of 300 pence per
share. The rights issue is due to close on 15 June 2001. Earnings (loss) and
dividends per share figures in this document are stated before adjusting for
the dilutionary effect of this rights issue, the exact impact of which will
only be known on closing of the rights issue. |
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