BT completes £2.3bn property sale

Debt edging downwards

BT has secured the £2.3 billion sale of its property portfolio in a move that could see its debt mountain fall to just £13 billion.

The deal with Telereal Holdings Limited - a 50:50 joint venture owned by Land Securities Trillium and The William Pears Group - is subject to Telereal raising the cash on the bond markets.

BT's property estate consists of six million square metres of floorspace in offices, depots and telephone exchanges. The telco will lease back the property it needs.

Sir Christopher Bland, Chairman of BT, said: "This represents a further step forward in BT's drive for cash and the reduction of its headline debt, while at the same time outsourcing a non-core competency."

Today's announcement means that that BT's debt - on paper at least - has fallen to around £13 billion.

It raised £2.14 billion with the sale of its Yellow Pages business. Its interests in Japan and Spain raised £4.4 billion; Malaysia contributed a further £0.35 billion. If the rights issue succeeds that will generate £5.9 billion and today's announcement will chalk-up £2.3 billion - a total of £15.09 billion wiped off its £27.9 billion debt mountain.

Of course, not all the cash has been banked yet and there's still a long way to go - but hey, it's a start. At least it should keep the bailiffs away for another week or so. ®