AT&T announced it has completed the sale of its wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America. The deal, which was first announced over a year ago, gave AT&T's coffers a $1.95 billion cash infusion, which it said would be used to redeem all of the preferred interests in a subsidiary (PR Holdings).
With the Liberty deal, AT&T kept its FirstNet responsibilities and relationships, including its FirstNet network core and service capabilities, as well as DirecTV and certain global business customer relationships. Liberty Latin America, which is backed by cable legend John Malone, is now supporting AT&T’s FirstNet build in Puerto Rico and the U.S. Virgin Islands.
The deal also included leases and real estate assets and 1.1 million mobile subscribers and contracts, along with 1,300 former AT&T employees moving over to Liberty.
AT&T has shouldered a heavy debt load ever since it bought Time Warner in 2018. AT&T has been reducing its debt load, thanks in part to pressure from Elliot Management, and building up a war chest for upcoming spectrum auctions. There has been some speculation that AT&T is also looking to offload its DirecTV and Xandr assets.
At the close of the third quarter in September, AT&T's net debt was $149 billion, which marked a slight decrease from $151 billion a year ago. In Monday's press release, AT&T said it would continue to pursue "additional non-core asset monetization opportunities."
Near the end of last month, the Department of Justice (DoJ) announced it was requiring AT&T and Liberty Communications to offload certain assets to Puerto Rico-based WorldNet in order for Liberty to continue with its acquisition of AT&T's assets in both Puerto Rico and the U.S. Virgin Islands. Liberty Communications is a subsidiary of Liberty Latin America.
Liberty Latin America entered into a consent agreement with the DoJ to sell-off some its B2B operations that are part of its operations in Puerto Rico to WorldNet in order to alleviate the DoJ's concerns.
WorldNet also has an option to buy segments of AT&T's aerial fiber-based core network, but AT&T hasn't commented on the possible sale of those assets.