LONDON - British Telecommunications will spin off its recently renamed wireless division mmO2 PLC as a separate, publicly traded company on Nov. 19.
The demerged mmO2 will carry a debt of $722 million, well below the $2.9 billion of debt the wireless company had previously been expected to carry, BT said in a statement Wednesday.
The remaining assets of BT will officially be known as BT Group once the demerger occurs, at which time BT shareholders will receive equal numbers of BT Group shares and mmO2 shares to replace their old holdings, BT said.
BT announced in May that as part of its effort to reduce its debt - which then stood at $42 billion - by more than $13 billion by March 2002, it would spin off BT Wireless as a separate company and rename the remaining segments of the company BT Future.
The new mmO2 will be worth an estimated $14.5 billion to $21.8 billion and will be launched with a debt level similar to that of its rival Vodafone Group, a BT spokesman said.
In comparison, Orange held around $2.9 billion of debt when parent company France Télécom took it public in February.
BT shareholders will be asked to approve the demerger of mmO2 and BT Group - both of which will be traded on the London and New York Stock Exchanges - in a meeting on Oct. 23, BT said.
BT will give more details of the demerger to analysts later on Wednesday.
On Tuesday, BT announced the new mmO2 name, adding that the new company's assets will all be rebranded as O2 by the second quarter of 2002. Assets of the wireless division include BT Cellnet in the U.K., VIAG Interkom in Germany, Telfort Holding in the Netherlands, Esat Digifone in Ireland and Manx Telecom in the Isle of Man.
BT (BT.A) shares traded on the London Stock Exchange had fallen in late morning trading by 3.53 percent to 4.0325 pounds, a loss of 0.1475 pounds from its Monday closing price.
On the New York Stock Exchange on Monday, BT's (BTY) share price closed at $60.49, down $2.12 or 3.39 percent from its close the day before. BT's U.S. stock price has experienced a 52-week high of $132 per share and a more recent 52-week low of $58.2 per share.
