Speaking on a conference call following the release of GTT’s first-quarter results, Calder confirmed that the division has been operationally separated out from the rest of GTT as “part of the process of ultimately selling and monetising the division”. GTT may raise €1 billion for the unit, according to Reuters last week.
The division is essentially formed of the former Interoute and Hibernia Networks companies, which GTT bought over the past few years. The assets “are not critical to us”, he said, once GTT becomes a services company.
GTT completed purchase of Hibernia Networks in January 2017 for $590 million, and Interoute at the end of May 2018 for $2.3 billion. They were two of the most recent of a series of acquisitions over a 10-year period (see chart). The unit went on the market over the past few weeks, after GTT instructed Credit Suisse and Goldman Sachs in November as its financial advisors for the potential sale of the infrastructure division.
The group’s EVP of corporate development, Chris McKee, said in the conference call that GTT has already had meetings with potential acquirers. “We have a number of interested counterparties. There remains robust interest.”
The Reuters news agency reported that bankers were now “looking at arranging debt financings of up to €1 billion” for the infrastructure division. The money will be used to pay down debt, said Calder in the conference call.
In the first quarter results, GTT reported revenue 0.2% up compared to the fourth quarter 2019, but down 5.7% compared to the first quarter 2019. Net loss was $83.3 million for the first quarter 2020 compared to a net loss of $19.1 million for the fourth quarter 2019, and a net loss of $27.3 million for the first quarter 2019.
