Shares soar as beleaguered BT names new finance chief

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The Independent Online

British Telecom turned the tables on its City critics yesterday by appointing a new finance director, raising hopes that a forthcoming strategic review will help reverse the group's ailing fortunes.

British Telecom turned the tables on its City critics yesterday by appointing a new finance director, raising hopes that a forthcoming strategic review will help reverse the group's ailing fortunes.

Robert Brace, BT's finance director since 1993, will leave the company in December.

His replacement is Philip Hampton, the finance director of BG Group, the transport and exploration arm of the former British Gas. With the appointment last week of the former Diageo chairman Sir Anthony Greener as BT's deputy chairman, this marks the second time that the troubled telecoms giant has brought on board executives with substantial experience in restructuring multinationals.

BT's shares rebounded from an early decline on the announcement, to close up 7.7 per cent at 740p. The City hopes the management revamp will yield measures to reduce the company's debt load, forecast to hit £30bn next year. Yesterday's share price gain takes BT off near two-year lows, but the shares still stand at less than half the1,520p high they reached in January - just one month before the company issued a profits warning.

Mr Brace, 50, is planning to move to the US from January. He is understood to be considering several offers inside and outside the telecoms sector.

BT's chief executive, Sir Peter Bonfield, said: "Robert has been a key member of the BT management team. We have worked closely together over the past four years, and he has given me tremendous support."

In a statement, Mr Brace said: "I have been group finance director of BT during some of the most exciting and challenging times in the history of the company. However, I would like a change."

News of the departure comes as BT enters the seventh month of a wide-ranging strategic review that is scheduled for completion in December, but which could now be presented with its interim results next month. Perhaps the most contentious issue is whether BT should undertake a radical breakup.

This could see its local loop and national networks combined in a separate wholesale operation. That would leave Wireless, Concert, Ignite and BTopenworld, the wholesale and retail internet operations, as well as a retail fixed-line arm as stand alone operations which could also be floated.

Analysts believe Mr Brace's resignation raises the likelihood that BT will engage in a broader restructuring.

Mr Hampton, 47, who will join BT on 1 November, went to British Gas as finance director in 1996, prior to its demerger into BG Group and Centrica, the retail gas distribution arm.

Mr Brace's departure is thought to leave non-executive chairman Sir Iain Vallance isolated in opposing measures to modernise the company's conglomerate structure. Last weekend, BT took the unusual step of actively denying newspaper reports that Sir Iain would depart early next year.

A BT spokesman, commenting on Mr Brace's departure, said: "There's absolutely no link with the events of last weekend."

It is understood Mr Brace decided to leave BT when it became clear he would not be considered for the chief executive's position when Sir Peter, 54, retires.

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