Cable & Wireless Says Break-Up Not An Option
Wednesday September 18, 5:16 am ET
LONDON -(Dow Jones)- Cable & Wireless PLC financial director David Prince said Wednesday that the company's review of its lossmaking C&W Global division won't include radical options such as a sale or de-merger.
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Asked about whether such options are under consideration, Prince told Dow Jones Newswires: "At the moment, that is not on our agenda."
"What is on our agenda is moving to cash-flow break-even (and) taking the actions necessary for that," he said.
Prince's comments come after analysts said a radical move is needed if the company is to stop trading at a substantial discount to its break-up value, a discount largely because of the cash-consuming C&W Global unit.
Prince said: "The chairman, the deputy chairman and (Chief Executive) Graham Wallce are very much focused on realizing value and taking the necessary options to do that. But at the moment, if you actually look at a break-up scenario, that doesn't necessarily get you there.
"Given we get the Global business onto free cashflow positive, that will take the negative discount out of our share price - or should," he said.
Prince said the U.S. remained a "tough market," but the company was "hoping to pick up some of the fallout business" from other carriers in distress.
"We are seeing steady growth in the U.K. enterprise customer base," he said, with business being won, although at a slower pace than it would like.
"We are steady state in our Japan operation," he said.
Prince said he was keeping the tightest control possible on capital spending.
He said this week's announcement of the shutdown of the company's U.S. voice business could be followed by other moves to cut costs.
"You have to look where you're strong as a business, and build on that, and cut out the nice-to-haves," Prince said. |
