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BT plans £400m sale of Irish unit

Edmund Heaphy
Finance and news reporter
BT has been operating in Ireland since 2001. Photo: Reuters

Telecoms giant BT (BT-A.L) is planning to auction off its Irish unit for around £400m ($515.6m) in the wake of the accounting scandal in its Italian division.

The move would mark a retreat from Ireland for the £22bn group, which has operated there since 2001.

In 2018, BT’s 600-person Irish company, which mainly handles corporate customers, made a profit of €34m (£29m) on sales of €425m (£368m).

In addition to its connectivity, IT outsourcing, and call-centre business in Ireland, BT also owns extensive infrastructure assets in the country, including around 2,500km of fibre-optic cabling.

The potential sale of the unit, which was reported by the Telegraph, will be handled by Bank of America Merrill Lynch, which is already assessing first-round bids.

BT has not yet been able to offload its scandal-plagued Italian division, whose accounting irregularities have cost it hundreds of millions.

Italian prosecutors this week alleged that senior executives at BT were involved in artificially inflating the financial performance of the company.

Senior executives in the company’s Global Services division have already exited, and Gavin Patterson stepped down as CEO in January amid pressure about revenues.

As a result of the scandal, BT has chosen to focus on 800 of its largest corporate accounts and has moved to improve profitability by selling off its network assets across the world.

Nearly two decades ago, BT spent billions acquiring Esat Telecom, a joint venture between Norwegian operator Telenor and Irish entrepreneur Denis O'Brien.

The mobile division of Esat Telecom formed part of BT’s stock market float of O2 in 2001, and BT sold off the rest of its consumer operations in Ireland to Vodafone in 2009.