BT 2001 Annual Report Download - page 9

holding company to enhance corporate
£exibility and provide scope for further
subsidiary listings where advantageous
to shareholders. We also detailed plans to
create a new network company, NetCo,
which would be both structurally and
managerially separate. Following this
corporate reorganisation, and subject to
the satisfactory outcome of necessary
discussions with the UK Government
and Oftel, our intention was to seek a
separate listing for up to 25% of NetCo.
During 2000, we had borrowed to
¢nance acquisitions with the intention of
reducing the level of indebtedness by
asset sales and other means. We
identi¢ed the need to introduce new
equity capital into the business to
support the reduction in the
unsustainable level of group debt and
we indicated our intention to raise new
equity through the sale of minority
stakes, notably of BT Wireless.
Our aim was to reduce the net debt
of the group by December 2001 by at
least »10 billion using the cash proceeds
from the issue of equity in the various
initial public o¡erings (IPOs), together
with the proceeds of disposals of non-
core businesses and assets. The weakness
of the IPO market, particularly for
telecommunications companies, has
caused us to review whether the sale of
equity in BT Wireless and Yell still
constitutes the best option to strengthen
the group’s capital base.
The Board has concluded that
shareholders’ interests are best served by
a rights issue to the company’s existing
shareholders. On 10 May 2001, the Board
announced that BT is proposing to raise
approximately »5.9 billion, after
expenses, through a rights issue. The
new equity introduced by the issue,
together with cash from the disposals
discussed below, should allow us to meet
our debt reduction target of »10 billion
by December 2001. Furthermore, the
rights issue enables the implementation
of structural change.
We now intend to demerge BT
Wireless, which we expect will include
all of BT’s wireless assets in the UK (BT
Cellnet), the Isle of Man (Manx Telecom),
Germany (Viag Interkom), the Republic
of Ireland (Esat Digifone) and The
Netherlands (Telfort). BT Wireless will
also include Genie, one of Europe’s
leading mobile internet portals.
We continue with our plans to create
a new holding company to give us
corporate £exibility and to facilitate
other potential acquisitions, demergers,
disposals or IPOs. We have determined
that, in order to demerge BT Wireless
e⁄ciently, the new holding company
structure should be put in place at the
same time as the demerger. On demerger,
the capital structure of BT Wireless is
planned to include up to »2 billion of
debt. We are reviewing our plans for Yell
BT Annual report and Form 20-F 09
Years ended 31 March
2001
£m
2000
£m(a)
1999
£m(a)
Turnover summary
Fixed-network calls 5,655 5,908 6,026
Exchange lines 3,674 3,526 3,351
Receipts from other operators 2,814 1,974 1,417
Wireless products 2,760 2,170 1,400
Private services 1,091 1,135 1,140
Solutions 1,074 915 746
Yellow Pages and other directories 754 642 491
Customer premises equipment supply 726 847 870
Other sales and services 1,879 1,598 1,512
Group turnover 20,427 18,715 16,953
Share of associates’ and joint ventures’ turnover 9,937 3,364 1,270
Trading between group and principal joint venture (698) (176) –
Total turnover 29,666 21,903 18,223
(a) Figures for the 1999 and 2000 financial years have been restated to conform with the method of classification used in the 2001 financial
year.
Years ended 31 March
2001
£m
2000
£m
1999
£m
Group turnover on basis of origin
UK 18,642 17,866 16,364
Europe, excluding the UK 1,183 285 240
Americas 368 383 237
Asia and Pacific 234 181 112
Total 20,427 18,715 16,953