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Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (2812)	5/30/2000 7:58:00 AM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Vodafone: Sales Will Cut Debt, Pay for 3G By Richard Baum LONDON (Reuters) - Cellphone giant Vodafone AirTouch Plc said on Tuesday its $37.61 billion sale of Orange to France Telecom would help it pursue third-generation (3G) mobile licenses without fresh funding from shareholders. Vodafone CEO Chris Gent told a teleconference the deal, plus the sale of shares in other businesses, would more than offset the billions of dollars it will have to pay to run broadband mobile services in the UK, Germany and Italy. But he slammed the way Britain organized its 3G auction to maximize bids, and threatened to move his headquarters out of the UK unless the government changed proposed tax rules. Speak your mind Discuss this story with other people. [Start a Conversation] (Requires Yahoo! Messenger) Gent, who also announced a bigger-than-expected 30 percent rise in annual earnings, said the combined effect of disposals and license fees would be to reduce Vodafone's debt to its $16.67 billion level at the start of last year. ``The group is in a strong position to meet the requirement of UMTS auctions and to meet its obligations to its bond holders,'' Gent said. ``We won't have to go to shareholders.'' Vodafone's proportionate earnings before interest, tax, depreciation and amortization (EBITDA) -- analysts' preferred yardstick of the company -- rose to $5.92 billion in the year ended March 31 from $5.08 billion, beating forecasts of $6.1 billion to $6.5 billion. Pre-tax profits rose 37 percent to $5.78 billion, while turnover grew at the same pace to $20.95 billion. City Welcomes News Vodafone shares, which had fallen 25 percent in the last three months amid concern over its rising debt, rose 5.2 percent to 296.25 pence. ``I think the price they've got for Orange seems a good one. Certainly the numbers (profits) seem slightly ahead of everyone's forecasts,'' said Christian Maher, an analyst at Investec Henderson Crosthwaite Securities. The group currently had debt of $29.34 billion following the acquisition of Mannesmann AG and this would rise by almost $10 billion when it paid for its UK 3G license around September, Gent said. The $23.01 billion cash proceeds from the Orange sale plus other disposals would offset license fees in Germany and Italy to reduce its debt back to $16.67 billion by the end of the current financial year. He lambasted the way the British government organized its Universal Mobile Telecommunications Systems (UMTS) auction to maximize its proceeds by reserving a specific license for a new entrant. ``It was much more than we expected to pay,'' Gent said. ''Other governments are having a more open and transparent process without the reservation of specific slots for newcomers.'' Despite the high price of the license, Vodafone expected returns of at least 15 percent on its investment in 3G services in the UK. Move Abroad Threatened He threatened to move the company's headquarters from Britain if talks with the government over tax proposals failed. Vodafone was pushing the government to amend measures aimed at preventing tax avoidance but which Gent said could lead to double taxation. The company expected to resolve the dispute, but would consider moving overseas ``if all else fails.'' Gent said Vodafone expected to pay more for its German 3G license than its UK one because of the greater population. It would raise money for license fees by floating two businesses acquired with Mannesmann. It planned an initial public offering in Infostrada of Italy in September or October, and of Arcor of Germany a couple of months later. Further funds would come from the sale of a 7.5 percent stake in Cegetel of France and the disposal announced on Tuesday of Mannesmann's tube business. Gent declined to say whether Vodafone planned further acquisitions, but said he wanted to expand in Asia, Latin America and the Middle East. Vodafone said it had 39.1 million customers at the end of March, 54 percent more than a year earlier. It declared a dividend of 1.335 pence per share. The results included 12 months of U.S. operator Airtouch but preceded the period when it bought Mannesmann and set up its Verizon joint venture with Bell Atlantic Corp