Lazard issues revised proposal for Altice USA fibre JV
Lazard has contacted financial sponsors with a downsized proposal for Altice USA’s [NYSE: ATUS] fibre joint venture (JV), TMT Finance understands.
As previously reported by TMT Finance, Lazard was hired by the operator, which was understood to be seeking to raise US$1.5bn from a JV partner. Under the original proposal, the US$1.5bn would be used to deploy fibre to around two million homes across numerous states in the first phase, all of which would be outside the existing Altice USA and Suddenlink operating areas, sources said.
However, Lazard is understood to have contacted parties in late April with a revised proposal which seeks a smaller initial investment from potential JV partners and a reduced initial deployment target, which will now focus on just one region in the first phase, sources said.
According to one source, Altice could now be seeking an initial equity investment of around US$670m with an aim to pass 800,000 homes. This initial phase would be focused on south New York state and Pennsylvania, another added. The new proposal also includes increased tolling rates to initial users, said a third source.
An initial round of bids based on the original proposal was understood to have been due around February 17. Sources subsequently told TMT Finance that the process had slowed, and that the operator could have been working with banks on a staple financing deal to accompany the proposal.
In March, Altice USA appointed Alexandre Fonseca, current co-CEO of Altice Group in Europe, as a director and chair of the board. He succeeded Dexter Goei, who stepped down as executive chairman but remains a director of the board.
This followed other senior leadership changes including the appointment of Marc Sirota who joined from Comcast as chief financial officer, effective March 1, and the recruitment of David Williams who joined on February 21 as executive vice president (EVP), chief revenue officer (CRO). Also on February 21, Leroy Williams joined as EVP, chief growth officer from Samsung Electronics America.
Meanwhile, in May, AT&T [NYSE: T] and BlackRock [NYSE: BLK], through a fund managed by its Diversified Infrastructure business, closed their fibre joint venture (JV) to form Gigapower. TMT Finance is exclusively reporting on the debt financing for the JV, having noted there could be up to 10 banks involved in the targeted financing, which is understood to be around US$1.6bn to US$1.7bn.
Altice USA and Lazard did not respond to request for comment.