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Thursday, 4 January, 2001, 11:58 GMT
BT to sell 2bn worth of property
BT's Mobile House
BT wants cheaper office accommodation outside London
The UK telecoms firm BT is to sell about 2bn worth of its property in order to pay off some of its huge debt.

The company's portfolio comprises about 7,500 properties, of which about 70% are operational buildings for which BT said it would retain the freehold and exclusive control.
BT's Telecom Tower
Telecom Tower: Not included in sale

The remaining 30% are set to be sold outright. BT claims it will be the biggest property transaction of its kind seen in the UK.

The telecoms regulator Oftel said it wanted an assurance from BT that the disposals would not affect the firm's ability to meet its licence and other obligations, including those relating to local loop unbundling and provision of the universal telephone service.

Director general David Edmonds said Oftel would seek "full information" from BT about the disposals and leasing arrangements.

"I know that BT is also fully aware of... the need to retain control of its operational buildings such as telephone exchanges."

3G licence costs

BT, the former state-owned monopoly, has debts of about 30bn ($45bn).

Most of it has been built up as the firm has been forced to pay out huge sums to buy licences to operate third generation mobile phone services across Europe.

Some of the properties will be leased back, while others will be vacated as part of BT's long term programme to move out of central London to cheaper, outlying areas.

The sale does not include the landmark Telecom Tower in central London.

Shares rise

Chief executive of BT business services Geoffrey Almeida said: "This approach realises the value of these assets and increases shareholder value by enabling BT to focus on its core business rather than acting as owners and managers of an extensive property estate."

BT shares have underperformed the market by more than 50% in the past year but rose strongly on Thursday morning as part of a wider market bounce after the unexpected cut in US interest rates.

By 0947 GMT, the shares were up 44 pence or 8% at 604p.

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