Orange will sell a third of its current participation in BT through a private placement of approximately 133 million shares, owned by its subsidiary Atlas Services Belgium. As part of the transaction, BT will place an order for GBP 200 million at the placement price, part of which for the benefit of its Employee Share Ownership Trust. Orange said that the sell-down represents around 1.33 percent of the share capital of BT.
At the same time as the share sale, Orange will issue roughly GBP 520 million in convertible bonds due in 2021 that will be exchangeable into BT shares. This second transaction, which represents another third of Orange’s participation in BT, is designed to benefit Orange in the event of a future increase in BT’s share price. The company would retain a 1.33 percent stake in BT in the case that the exchange rights underlying the bonds are exercised in full.
Orange’s decision to reduce its exposure to BT's shares follows a difficult first half of the year for the UK group, which in January issued a profit warning on the back of its accounting problems in Italy. Orange acquired the stake in BT as partial payment for the sale of EE.
