Shares in troubled French media and telecoms firm Altice soared in early trading Tuesday, after it announced a major group reorganisation spinning off its US arm from its European business.

Altice said in a statement late Monday that it "has approved plans for the separation of Altice USA Inc. from Altice NV", adding the new arm would be renamed "Altice Europe".

"The separation will enable each business to focus more on the distinct opportunities for value creation in their respective markets and ensure greater transparency for investors," the company added.

The news, which came only two months after Altice founder Patrick Drahi retook the company's reins, was welcomed by the markets early Tuesday, as shares soared by 7.45 percent in early trading on Amsterdam's AEX.

Share prices bubbled up to hit 10.15 euros, before beginning to drop back below 7.0 percent, as the AEX itself rose by some 20 percent.

Altice has emerged as a major telecoms player in Europe and the United States in recent years with a series of high-profile acquisitions, but disappointing earnings have renewed concerns about its towering debt.

It has moved to try to shore up confidence after share prices plunged by more than a third in a week in November. And the company said the re-organisation should be completed by the end of the second quarter of 2018.

The two companies will be led by separate management teams, although Drahi will retain control of both.

Altice has grown rapidly since it was founded in Luxembourg in 2001, moving into the cable, content production, telecom, media and online video advertising sectors.

Its acquisitions, which included France's second-largest mobile firm SFR in 2014 cable operators Suddenlink and Cablevision in 2015, made it the fourth-largest US cable operator.

But the purchases were cobbled together through loans, and the firm, which posted 23.6 billion euros in sales 2016, recorded a debt of 51 billion euros at the end of September.

Results posted in November showed a 1.8 percent drop in sales in the third quarter to 5.75 billion euros due to reverses in Altice's main markets in France and the United States, although its operating profit and margin both ticked modestly higher.

 

Source: AFP