Billionaire Patrick Drahi acknowledged flaws in the management of Altice group but said he isn’t worried about its debt, in his first meeting with employee representatives in France since a corruption probe hit his telecommunications empire this summer.
(Bloomberg) — Billionaire Patrick Drahi acknowledged flaws in the management of Altice group but said he isn’t worried about its debt, in his first meeting with employee representatives in France since a corruption probe hit his telecommunications empire this summer.
The French-Israeli tycoon said his group made mistakes “based on trust” and shouldn’t have centralized procurement decisions, during a videoconference with employee representatives affiliated with French union CFDT in Paris on Tuesday, according to a union transcript seen by Bloomberg.
“It was stupid to centralize purchasing,” Drahi told employee representatives remotely from Tel Aviv. He said that choosing Huawei as a supplier was “also a huge mistake.” Staff, unions and outside consultants had voiced concerns for years about the company’s relationships with some of its biggest vendors, including Huawei, Bloomberg reported.
A criminal investigation in Portugal into suspected corruption, money laundering and tax fraud has sent shockwaves through Altice and resulted in the arrest of Drahi’s right-hand man Armando Pereira, and the suspension of executives and suppliers in France, Portugal and the US.
Read More: Altice Employees Raised Red Flags Years Before Corruption Probe
The Portuguese investigation comes as Drahi has put large swaths of the Altice empire up for sale as it struggles to finance $60 billion of debt accumulated through years of acquisitions.
The group’s debt is not a problem, Drahi told employee representatives of his French phone company SFR. “There’s nothing before 2027 except €1.5 billion in 2025, that’s a non-issue,” Drahi said of his debt maturities. “Rates are going to come down, you’ve noticed that luxury goods are collapsing. I think people are going to put their money back into bonds. So if there’s more demand, rates will come down. The current geopolitical situation will bring rates down,” he said.
The billionaire is weighing a sale of a stake in carrier SFR to private equity, and flagged a “problem of growth and reputation” in his French business, and the need to win more valuable subscribers. He said that he is not willing to increase his stake in BT Group Plc “in a time of war.”
Although it is getting a lot of interest, Drahi added that he is not looking to sell his “strategic” media business in France, including TV channel BFMTV, even as Altice Media was mentioned as a “high value asset” by Dennis Okhuijsen, a senior adviser to Altice, in a meeting with investors last month.
Altice says it is a victim of the corruption allegations and is running internal audits at its various branches. The group declined to comment on the meeting.
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