British Telecommunications (quote: BT) on Tuesday downplayed investor controversy over the future of its Yell directory division, following a shareholder meeting Monday night.
Following media speculation over the weekend, the dominant telco issued a statement to the stock exchange Monday, admitting the company is "reviewing its options for Yell", and may consider a "full demerger" rather than the planned flotation. The scheme would put Yell stock directly into the hands of BT shareholders.
BT is searching for ways of reducing its £10bn debt, and hoped to raise around £1bn from the Yell flotation. Market conditions may have scuppered that idea, however. The move to demerge is also understood to be unpopular with BT bondholders, who see it as damaging to the company's long-term creditworthiness.
The telco downplayed the importance of the meeting and the statement, calling them "business as usual".
A spokeswoman said BT had made the statement in order to be free to discuss the Yell issue Monday night without violating stock exchange rules. "It was to be expected that following on from speculation in the media over the weekend, we would be asked about a full demerger of Yell," she said. "We couldn't say no and lie, or say yes, and not tell anybody else."
BT announces its third-quarter financial results 8 February.
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