Orange SA, France’s biggest phone company, is set to announce the sale of its Dominican Republic unit for more than 1 billion euros ($1.35 billion), Chief Executive Officer Stephane Richard said.
“There’s a high probability we’ll make an announcement about selling our Dominican Republic unit in the coming days for a price well above 1 billion euros,” Richard told reporters today at a conference in Barcelona. “We have no plans today to use that cash to make acquisitions -- it will give us more balance-sheet flexibility.”
Orange put its Dominican Republic business up for sale this year and has said it attracted multiple bids for the asset. Digicel Group Ltd., seeking to expand its position as the Caribbean’s largest phone company, is among the bidders, people with knowledge of the matter said in September.
Sales and earnings at Orange are falling as competition with rivals including discounter Iliad SA weighs on prices. The former French phone monopoly’s stock has rebounded since reaching a decade low in early July, partly reflecting Richard’s efforts to reduce expenses.
The Paris-based company, which has diversified into countries from Poland to Egypt, is also trying to keep a lid on debt. The company will reach all its targets this year and is sticking with its 2014 forecast to stabilize earnings before interest, taxes, depreciation and amortization, Richard said.
“For 2013 I can confirm very comfortably we will reach all our targets and we will be above expectations on cost reductions,” Richard said. “For next year, our ambition is still to stabilize Ebitda -- I think we have the capacity to do it. We’ll have to be very ambitious on costs.”
“Clearly we want to stay very serious and disciplined in terms of debt position,” Richard said. “That means we have no significant financial margin to do M&A and, when we think that it is logical, we can also sell some assets.”
Orange is still considering strategic alternatives including an initial public offering for EE, its U.K. wireless venture with Deutsche Telekom AG, Richard said.
“All options are open for EE -- an IPO can be one, so can a status quo of shareholdership with Deutsche Telekom and bringing in an investment bank,” Richard said. “No decision has been made.”