BT Wireless, the mobile phone arm of British Telecommunications, has appointed David Varney, former head of BG, as chairman in the run-up to its demerger later this year.
Once BT Wireless is successfully split from the rest of BT, Mr Varney, 55, who takes up the £500,000-a-year position on Monday, will be eligible for a £150,000 bonus.
The new chairman, who is on a two-year contract, is well versed in demergers having overseen two at British Gas. He joined British Gas in 1996 as chief executive of the proposed BG, which was created when British Gas was split into BG and Centrica. He left that company in October last year once it was split again into the BG Group and Lattice Group.
Under the terms of his contract at BT Wireless, he will not be paid an annual bonus although, like BT chairman Sir Christopher Bland before him, he is investing £500,000 of his own money in BT shares. So long as he retains that stock, it will convert into options over shares in BT wireless once the demerger is complete. Unlike Sir Christopher, however, he will not be given additional BT shares.
Mr Varney said he expected to be working "seven days a week" for the first 18 months to two years in his new role, a period he said would be "frantic". After that, he intends to work a two to three-day week although that will be on a reduced salary. "Part of the challenge of this is bringing a new company into the FTSE 100 and establishing it," he said. "I enjoy the industry."
He said his priority would be recruiting a board of directors to supplement his own work and that of Peter Erskine, the company's chief executive. BT wireless will also be rebranded at the end of Autumn.
BT also announced it was selling its UK property portfolio for £2.3bn, some £300,000 more than expected, to Telereal Holdings, a 50:50 joint venture between Land Securities Trillium and the William Pears group. The deal helped push BT shares up almost 4 per cent to 450p.
It is conditional on Telereal completing its funding arrangements. It is expected to raise finance on the bond markets to pay for the portfolio.
Separately, Yell, the business directories business that BT recently sold to Apax and Hicks, Muse, Tate & Furst, is also thought to be tapping the bond markets. Roadshows for its £500m bond are expected to start early next month.Reuse content