AT&T Inc. (NYSE: T) has announced it has reached an agreement to sell its operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America Ltd. (NASDAQ: LILA) for $1.95 billion in cash. According to the announcement, the sale includes “spectrum; real estate and leases; customers – including 1.1 million wireless subscribers; and contracts.” AT&T hopes to complete the sale within six to nine months, with the approval of the Federal Communications Commission and Department of Justice.
AT&T plans to use the proceeds from the sale to continue reducing its debt. The company acquired a large amount of debt in recent years from making big deals, including acquisitions of DirecTV and Time Warner Inc. AT&T pledged to cut its debt by up to $20 billion in 2019. As part of that pledge, the company has sold its stake in streaming service Hulu for $1.43 billion and WarnerMedia’s Manhattan offices at Hudson Yards for about $2.2 billion. In all, AT&T said it has raised a net $11 billion this year to put towards its debt-reduction effort.
AT&T reported $166 billion in long-term debt as of December 31, 2018. By June 30, 2019, that figure had dropped to $158 billion. The company reports its third-quarter earnings Oct. 23 and has an investor day scheduled for Oct. 29 to provide updates on its financial plans. AT&T stock is up roughly 20 percent this year.
Denver-based Liberty is part of U.S. cable pioneer John Malone’s global empire. Liberty Latin America operates in more than 20 countries around Latin America and the Caribbean. Liberty said in its statement that the mobile customers transferred from AT&T to Liberty “will continue to benefit from free roaming services between Puerto Rico, the U.S. Virgin Islands, and the mainland United States, Mexico and Canada.”