BT grasps the nettle at troubled Concert venture

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British Telecommunications is expected to announce early next week that its loss-making Concert joint venture with AT&T is to be broken up in a move that will force it to take a substantial restructuring cost and put 6,000 jobs at risk.

The exercise, which will put an end to an unhappy period of ownership for BT, is expected to detail that its 50:50 shareholders have agreed to "orderly unwind" Concert, a provider of telecoms services to business customers worldwide.

While a deal is not yet thought to have been signed off, banking sources believed a final announcement could come as early as Tuesday. "It's at an advanced but fairly delicate point," said one.

Concert has been under extreme pricing pressure. BT warned last month that it could incur "substantial" costs if the venture was unwound.

Analysts predicted BT might have to take a writedown charge of up to £500m even though it attributed a £1.4bn value to Concert in its balance sheet at the end of June.

They also expected BT to take a multimillion-pound restructuring charge to cover potential job losses.

The writedown would come on top of the £500m charge BT took last month to cover the decline in value of some of its investments, such as its 9 per cent stake in AT&T Canada and its 20 per cent holding in Argentina's Impsat.

"I doubt very much they would have to write off the whole lot [£1.4bn] because their share of the assets in that venture, which they'll presumably keep, do have some value," said one analyst who declined to be named. He believed there would be "substantial" job losses but did not think all 6,000 positions would be axed.

Unwinding the venture would also resolve the issue of whether BT would have to buy an extra 21 per cent stake in AT&T Canada. If Concert still existed in June 2003, BT would have been forced to buy up extra shares.

Sorting out Concert has been the top priority of Philip Hampton, the finance director, for some time. Talks between BT and AT&T have been taking place for several months, but were delayed slightly by the terrorist attacks in the US last month.

BT, which would not comment on the speculation yesterday, quickly down played rumours of the imminent departure of Sir Peter Bonfield, the chief executive. "There's no change there," a spokesperson said. "As far as we're concerned he'll be fulfilling his contract."

While most believe Sir Peter will leave BT before his contract expires at the end of next year, some have speculated he may depart in a matter of months.

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