AT&T said it is exploring the possibility of spinning off a minority interest in its Latin American entertainment business in an initial public offering, a move that some believe would help pare down some of the debt the company will incur as a result of its planned purchase of Time Warner Inc.
AT&T said in a statement that it is exploring an initial public offering of the unit for some time in the first half of the year and has filed a confidential registration statement with U.S. regulators. The company said there is no guarantee that the IPO will take place.
AT&T is currently gearing up for a legal battle with the U.S. Department of Justice over its planned purchase of Time Warner Inc. in a deal valued at $108.7 billion, including debt. If the deal gets approved – the Justice Department has already moved to block the deal, and a trial is scheduled to start March 19 on the matter – AT&T’s debt load would balloon to about $180 billion.
AT&T’s entertainment business in Latin America mainly consists of its DirecTV Latin America satellite TV service. DirecTV Latin America has about 13.6 million subscribers and includes a 93% interest in Sky Brasil, the largest satellite company in the strongest economy in the region and Pan Americana, which includes operations in Chile, Argentina, Columbia, Venezuela and Puerto Rico. AT&T has toyed with the idea of selling the unit in the past. A Reuters report last year said it was exploring a sale of the assets, which were valued at the time at about $8 billion.
