(Bloomberg) -- Altice France has agreed to sell a 70% stake in its data center business for €535 million ($586 million) as billionaire Patrick Drahi’s telecommunications group looks for ways to cut debt.
The data centers will be moved into a new company called UltraEdge, controlled by Morgan Stanley Infrastructure Partners, Altice France said in a statement on Tuesday. The assets include 257 data centers and office space from Altice’s carrier SFR, it said.
Bonds issued by Altice France SA rose after reports of the deal. Notes due in 2025 gained 1.6 cents on the euro to 93.7 cents, according to data compiled by Bloomberg, set for the largest rise since September.
“The sale is significant, because SFR has delivered an actual asset sale, whereas some had been worried it would not be able to deliver much or indeed anything, given some of the elevated rumored sale prices,” New Street Research analyst Russell Waller wrote in a note.
Drahi is selling off parts of his telecom empire to reduce the $60 billion in debt accumulated by the group through years of aggressive acquisitions. It’s also grappling with a corruption probe in Portugal that’s targeted some of Drahi’s key executives and confidants.
Including debt, UltraEdge will be valued at €764 million, Altice France said. The deal, which is expected to close in the first half of next year, will also include a “build-to-suit” agreement with SFR, which will generate about €175 million in the next seven years.
