The biggest telecom carrier of the United States, Verizon Communications Inc. (NYSE:VZ), is all set to divest its assets and focus on one single geography. The shares of the company inclined nearly 3 percent after reports of possible divesting of assets worth up to $10 billion. The telecom carrier is likely to sell assets from its landline unit and cell phone towers.
According to market experts, the value of assets in line for sale might even reach $15 billion and the announcement may come out as soon as next week. The telecom carrier spent up to $10.4 billion in the government mobile bandwidth auction last week pushing its debt levels higher. The sale out will help the company pay off its debts, which it accumulated primarily for its 45 percent stake repurchase of Vodafone Group Plc (ADR) (NASDAQ:VOD) owned fraction of Verizon’s wireless unit.
Lowell McAdam, CEO of Verizon Communications Inc. (NYSE:VZ), said,
“There are certain assets on the wireline side that we think would be better off in somebody else’s hands so we can focus our energy in a little bit more narrow geography.”
He further added the company might use these funds for either debt repayment or for the repurchase of the shares it offered in Vodafone Group Plc (ADR) (NASDAQ:VOD)’s deal.
Verizon Communications Inc. (NYSE:VZ) would have to pay the spectrum cost, $104. Billion, to the government in the next few weeks and other players like AT&T Inc. (NYSE:T) are already working to pay off the spectrum cost. The nation’s biggest telecom carried bid for 181 licenses in the AWS-3 spectrum auction for a total price of $10.4 billion.
The stocks of Verizon Communications Inc. (NYSE:VZ) are trading at $46.98 with current P/E ratio of 18.66 and market cap of $189.52 billion. The shares of the telecom company have remained stable in 2015.
This article has been written by Prakash Pandey.