Verizon close to selling $15-bn of assets to pay debt: report

Verizon Communications Inc, the largest telecom company in the US by market value, is mulling sale of assets worth up to $15 billion to pay its debts, The Wall Street Journal reported yesterday.

Citing unidentified sources, the journal said that negotiations are underway to sell the company's mobile telephone towers and parts of its landline business, which is the largest in the country.

An official announcement of the deal could come out by the end of this week and several prospective buyers could become part of it, the paper said.

The deal comes at a time when Verizon is working to pay down debt and cover the $10.4-billion it has to pay for the 181 wireless licences it bought in the government's spectrum auction that concluded last week.

Payments for the government's $44.9-billion record auction are due in the coming weeks. Rival AT&T which had acquired spectrum worth $18.2 billion in the auction is also believed to be arranging the funds through borrowings and asset sale.

The company's debt burden had increased substantially following its $130-billion buyout of Vodafone Group Plc's 45-per cent stake in their US joint venture (See: Verizon buys Vodafone's US joint venture for $130 bn).

Earlier in January, Verizon's chief executive Lowell McAdam indicated that it might sell some of its landline assets.

''There are certain assets on the wireline side that we think would be better off in somebody else's hands so we can focus our energy in a little bit more narrow geography,'' Adam said.

According to JP Morgan Chase & Co analysts, sale of Verizon's tower business could bring in about $5 billion.

New York-based Verizon is one of the largest telecom companies in the world with revenue of $127 billion in 2014.

In the fourth quarter, the telecom giant reported 7 per cent increase in revenue at $33 billion. Wireless business contributes approximately 70 per cent of the group's revenue.

Wireless revenues surged 11 per cent to $23.4 billion in the quarter compared to a year ago while wireline business dropped 1.4 per cent to $9.6 billion.