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(Adds details on share purchase, further background)
LONDON, May 14 (Reuters) - BT Group Plc is in talks
to sell a multi-billion pound stake in its wholly owned network
subsidiary Openreach to infrastructure investors to help fund an
ambitious expansion in fibre broadband, the Financial Times
reported on Thursday.
The FT said potential investors, including Australian
investment firm Macquarie Group Ltd and a sovereign
wealth fund, had held talks in the last three weeks with the
former telecoms monopoly.
Macquarie, however, was not interested in a deal, a source
close to the investment firm told Reuters.
BT declined to comment on the FT report.
Upgrading Britain's broadband network is the centerpiece of
Chief Executive Philip Jansen's strategy for BT, but rolling out
the fibre connections to 20 million premises by the mid to late
2020s will cost 12 billion pounds ($15 billion).
Shares in BT fell to 11-year lows, giving it a market
capitalisation of 10 billion pounds, after the company cancelled
its divided a week ago to help weather the economic impact of
the coronavirus.
Jansen said the pandemic, which has seen a surge in the use
of mobile phones and data, had made the network upgrade "a
matter of extreme urgency".
Cancelling the dividend until 2021/22 and only then
reinstating it halve the previous level will save BT 3.3 billion
pounds, analysts noted.
The company has multiple call on the cash, including its 5G
mobile network, pension deficit and expensive sports rights that
underpin its consumer broadband offer.
It will also face more competition across mobile, fixed-line
and TV after cable TV company Virgin Media and mobile operator
O2 agreed to merge a week ago.
Jansen, however, said last week he was focused on upgrading
Britain's broadband infrastructure, and he confident the
regulator Ofcom and the government would create the right
conditions for investment.
"Clearly in this environment the political and regulatory
will to encourage investment is very, very high," he said.
On Wednesday he demonstrated his confidence in BT's
prospects by spending 2 million pounds buying the company's
shares, according to a stock market filing on Thursday.
A person associated with the company's chairman and a
non-executive director also purchased stock, the filing said.
($1 = 0.8201 pounds)
(Reporting Paul Sandle and Pamela Barbaglia in London,
additonal reporting by Aakriti Bhalla in Bengaluru; Editing by
Shailesh Kuber, Toby Chopra and Lisa Shumaker)
