Billionaire Patrick Drahi states Altice corruption probe a ‘shock’

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Billionaire Patrick Drahi has actually cast Altice, the stretching telecoms group he constructed, as the victim of supposed scams committed by his long time partner Armando Pereira in his very first public remarks given that the scandal appeared last month.

“This has come as a shock and as a huge disappointment to me,” the Franco-Israeli business person stated on a call with financial obligation financiers on Monday. “If the allegations are true, I feel betrayed and deceived by a small group of individuals, including one of our oldest colleagues,” he included.

Altice has actually been rocked given that Portuguese authorities divulged a criminal examination in July. The probe centres on whether Pereira and others were associated with a plan to improve themselves by rigging the French group’s regional procurement procedures in Portugal. Pereira has actually been put under home arrest by judges while the cops probe continues.

Pereira has actually formerly rejected misbehavior.

The crisis comes as the group’s financial obligation stack has actually swollen to more than $60bn in the middle of increasing rate of interest. Drahi included that the examination in Portugal would have no influence on business or the group’s capability to pay its financial obligations, and assured that Altice was co-operating with authorities.

“I assure you that we take this matter very seriously, and we are taking swift proactive action to understand the truth and protect the group from any harm in the event that the allegations are substantiated,” he stated.

The billionaire, who constructed Altice through a series of debt-fuelled offers, likewise looked for to assure financiers that the group did not have any short-term maturities and would have the ability to deleverage and re-finance its loanings.

Drahi and Pereira have actually collaborated for years and individuals who understand them both have stated they formed a close tandem internally, with Pereira supervising of cost-cutting each time Altice purchased a brand-new business. Although the set have actually typically been referred to as co-founders, Drahi looked for to distance himself on Monday by calling Pereira a supervisor he had actually employed in 2003. 

Drahi clarified that Pereira did not have a direct stake in Altice, nor the Next holding business above it, however validated that he did make a little financial investment in Altice’s very first acquisition of less than 1 percent of the equity and got a brought interest indexed on Altice’s personal equity financiers.

“Over time, the form of his economic interest evolved, and since 2005 he did not own a single share or right in any of the Altice entities but simply maintained a carried interest of around 20 per cent of my personal economic interest,” stated Drahi.

The fallout from the probe has actually shaken Altice, which has mobile and high speed operations in the United States and Europe and increased to prominence throughout an acquisition spree under Drahi that consisted of the €17bn takeover of France’s SFR in 2014.

In the profits declaration launched prior to the call, Altice stated it was performing internal audits throughout its operations, that include broadband and mobile operators in France, the United States and Israel.

Altice assured a “full review and thorough reinforcement of the approval process on all procurement, payments, purchase orders and related processes”.


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