Altice France Debt: Telecoms Consortium Weighs New Bid

Altice France’s financial situation is more complex than previously indicated following a major restructuring last year. Newly revealed liabilities have increased the company’s total indebtedness by more than €1 billion, coinciding with ongoing discussions among rival telecoms for a potential joint acquisition.

Debt Concerns Resurface

Currently, total debts and liabilities at Altice France, controlled by billionaire Patrick Drahi, are estimated at approximately €17 billion, according to four sources familiar with the details. This figure contrasts with the company’s announcement after its October restructuring, which projected a reduction of consolidated net debt to around €15.5 billion, down from €24 billion. Recent quarterly reports show a net debt of €16 billion as of the end of September 2025.

Did You Know? Accounting standards do not always require companies to classify financial products related to supplier payments and asset securitisation as debt.

The discrepancy is largely attributed to Altice’s utilization of financial instruments linked to supplier payments and asset securitization. These include reverse factoring – a form of supply chain financing – and securitization, totaling €772 million as of the end of September 2025.

Potential Acquisition Complicated

At the beginning of the year, Altice France initiated due diligence with a consortium comprising three competing French telecoms – Bouygues, Iliad and Orange – exploring a joint bid for the majority of the business, including mobile operator SFR. A previous offer from the same consortium, valuing the company at €17 billion, was rejected by Drahi in October as insufficient.

The emergence of these additional liabilities further complicates the potential acquisition. Negotiations are hindered by the challenges of dividing the business among three competitors and reaching a mutually agreeable price. Any deal would also face rigorous scrutiny from competition regulators in both Brussels and Paris, who have historically opposed consolidation within the sector without substantial concessions.

Rising Interest Rates Add Pressure

Drahi’s telecoms empire was built on substantial debt during a period of historically low interest rates. However, the recent increase in interest rates has made this debt increasingly unsustainable. Altice France has experienced declining sales and earnings, but Drahi was permitted to maintain control during the restructuring to facilitate a sale. Similar restructuring negotiations are underway at Altice USA, and are anticipated at Altice International.

Expert Insight: The increased debt burden at Altice France significantly alters the negotiating dynamics, potentially reducing the valuation and increasing the risk for any potential acquirer. The need for regulatory approval adds another layer of uncertainty to the process.

Drahi is reportedly seeking liability clauses to protect him should the deal be blocked by competition authorities. Conversely, the consortium is seeking legal safeguards against potential tax and legal liabilities, including those related to ongoing criminal investigations involving Drahi’s former right-hand man, Armando Pereira.

Timeline for a Deal Uncertain

Time is of the essence, as Altice France faces significant debt repayments beginning in 2028. Four sources suggest that without a deal – either with the consortium or through the sale of assets like the XpFibre broadband network – the company could be forced into another restructuring within 18 months. However, one source disputes this, suggesting a piecemeal sale of assets could sustain the business.

Two individuals involved in the negotiations indicated that if an agreement isn’t reached by spring, the talks are likely to collapse. However, another source cautioned that the deal’s complexity makes establishing a firm timeline impossible.

Frequently Asked Questions

What is reverse factoring?

Reverse factoring is a type of supply chain financing where a company uses a third party to pay its suppliers earlier than the agreed-upon terms, often at a discount.

Who are the companies involved in the potential acquisition?

The companies involved are Altice France, Bouygues, Iliad, and Orange.

What is the status of the criminal investigations mentioned?

The source states Notice ongoing criminal investigations linked to Armando Pereira, Drahi’s former right-hand man, but provides no further details.

Given the complexities and financial pressures, what impact might a failed acquisition have on the French telecommunications market?