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How Debt Backfired on Europe's King of Leverage: QuickTake Q&A

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Patrick Drahi, billionaire and chairman of Altice SA, reacts during a news conference in Paris, France, on Monday, March 17, 2014. Drahi is on his way to buying SFR and merging it with Numericable SA, the cable provider he controls, if talks with SFR owner Vivendi SA result in a deal in the coming weeks.
Patrick Drahi, billionaire and chairman of Altice SA, reacts during a news conference in Paris, France, on Monday, March 17, 2014. Drahi is on his way to buying SFR and merging it with Numericable SA, the cable provider he controls, if talks with SFR owner Vivendi SA result in a deal in the coming weeks. Photographer: Ivan Guilbert

Markets are starting to test the mettle of the global telecom provider Altice NV and its billionaire founder, Patrick Drahi. Created in 2001 in the aftermath of the dot-com crisis, Altice grew into Europe’s biggest issuer of junk debt as it made acquisitions around the globe. It’s lost almost 60 percent of its market capitalization in the last month and investors are weighing whether Drahi and his management team will be able to cut or grow their way to better health.

The Amsterdam-based company narrowed its profit outlook to the lower end of a previous forecast last month, citing weak trading at its French unit, which contributes about half of the group’s revenues. That unit includes the second-largest French phone company, SFR, which in 2014 was bought and then merged with cable company Numericable.