PARIS (Reuters) - S&P cut Altice’s long-term credit rating by one notch to “B” on Thursday, saying the cable and telecommunications group needed to generate more cash to pay up its gigantic debt.
Altice, controlled by Franco-Israeli tycoon Patrick Drahi, has suffered a loss in investors after its French unit failed to return to growth at the end of last year.
The Netherlands-based holding, which had a consolidated total net debt of close to 50 billion euros ($61.89 billion) at the end of 2017, has lost close to 60 percent of its market value over the last twelve months, prompting Drahi to replace the chief executive and separating Altice’s U.S. and European activities.
“The downgrade reflects our belief that the group’s deleveraging and free operating cash flow (FOCF) in 2018 and 2019 will fall short of previous expectations,” S&P said in a statement.
A “B” credit rating is five notches below investment grade.
S&P added that its outlook was changed to stable but that it could lower the rating by one notch over the next year if key indicators do not improve.
Reporting by Mathieu Rosemain; editing by John Irish