**Title:** Patrick Drahi Considers Selling SFR After Restructuring Success
**Meta Description:** Patrick Drahi is eyeing a sale of SFR after stabilizing Altice France’s finances, raising questions for bondholders about their restructuring decisions.
**URL Slug:** patrick-drahi-sells-sfr-altice-france
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**Patrick Drahi Considers Selling SFR After Restructuring Success**
Billionaire telecom entrepreneur Patrick Drahi is experiencing a significant turnaround with his business, Altice France SA. After successfully negotiating a deal in February to reduce the company’s borrowings, Drahi has lifted Altice France out of negative equity. Now, he is contemplating the sale of SFR, the company’s primary asset and a major mobile-phone network in France.
This potential sale could be bittersweet for bondholders who recently agreed to a restructuring plan to help Drahi navigate financial difficulties. Last March, Drahi warned that Altice France’s €24 billion ($27 billion) net debt was unsustainable, indicating that creditors would need to accept losses. At that time, the company’s net leverage exceeded six times its profit, and its equity value was effectively zero.
The ongoing restructuring is expected to reduce net borrowings to just over €15 billion by the end of this year, with subordinated creditors facing the largest losses. In return, senior creditors will receive a 31% stake in the business, while junior creditors will get 14%. Drahi will maintain control of the remaining equity, which could soon see a significant increase in value.
With the company’s financial situation stabilized, Drahi is now in a strong position to consider a full or partial sale of SFR. This comes at a time when European regulators appear to be more accepting of consolidations in the mobile market, as evidenced by the UK’s approval of Vodafone Group Plc’s acquisition of rival Three. A potential deal in France may involve divesting SFR in parts to companies like Bouygues SA, Iliad SA, and Orange SA, according to Bloomberg Intelligence. Additionally, Emirates Telecommunications Group Co. may also explore a transaction.
However, the price could pose a challenge. Reports suggest that a deal could value SFR at up to €30 billion. Even if this figure includes Altice France’s stake in the XpFibre network, estimated at around €2 billion, it would still represent a substantial eight times the €3.5 billion EBITDA that CreditSights predicts the business could generate by 2027. While this valuation is not unreasonable, it is on the higher end of expectations. CreditSights estimates a base-case valuation multiple of five, which could rise to seven with a takeover premium and potentially higher if synergies are realized in a domestic deal.
A transaction at the lower end of the valuation range could still yield significant returns. For instance, a €22 billion deal would create €7 billion in equity value, with nearly €4 billion benefiting Drahi directly. While a swift sale of SFR at a favorable price would certainly benefit creditors due to their stake, it also raises an important question: Should they have resisted the restructuring and sought to take control of Altice France themselves? Such a move could have potentially yielded even greater returns.
The challenge for bondholders lies in the absence of a quick path to seizing control before 2027, when significant debt maturities are expected. A more aggressive group of bondholders might have pursued alternative strategies to maximize their returns.
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**FAQ**
**Q: What is the current financial status of Altice France?**
A: Altice France has successfully reduced its net borrowings to over €15 billion through a restructuring plan, lifting the company out of negative equity and positioning it for potential asset sales.
