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Shearman & Sterling Advises Orange on the Sale of BT Shares and a Financing at a Negative Interest Rate

21 Jun 2017
Shearman & Sterling has advised Orange in the sale of approximately 133 million shares in BT for an amount of GBP 383 million and the issuance of bonds exchangeable into BT shares for an amount of approximately GBP 520 million.

Orange announces it has launched the sell-down of approximately 133 million shares that its subsidiary Atlas Services Belgium owns in BT, representing around 1.33% of the share capital of BT, through a private placement by way of an accelerated bookbuilt offering. BT will acquire up to GBP 200 million in the placement of BT shares, part of which for the benefit of its Employee Share Ownership Trust, at the placement price. Such order will be fully allocated by Orange.

Simultaneously, Orange announces it has launched an offering of bonds exchangeable into BT shares due 2021 for a nominal amount of approximately GBP 520 million, at a premium of 35% to 40% above the share placement price carried out by way of a private placement.

The exchangeable bonds, with a maturity of 4 years (except in the case of early redemption), are issued in GBP. They will bear a coupon between 0% and 0.375% and will have negative interest rate after hedging in euros. The holders of exchangeable bonds may exercise their exchange right. Orange will have the flexibility to settle in cash, deliver ordinary shares of BT or a combination thereof. Settlement for the placement of the BT shares and the exchangeable bonds issue are expected to take place on 22 June 2017 and 27 June 2017 respectively. An application will be made for the exchangeable bonds to be admitted to trading on the Marché Libre d’Euronext Paris.

Orange would initially retain a 2.66% stake in BT. In case of exercise in full of the exchange rights underlying the bonds, Orange would retain a 1.33% stake in BT.

BNP Paribas and J.P. Morgan were Global Coordinators and Joint Bookrunners.

The proceeds of these transactions will be used for the general corporate purposes of Orange.

The Shearman & Sterling team was led by partner Hervé Letréguilly (Paris–Capital Markets) and included partners Sami Toutounji (Paris–Capital Markets), Patrick Clancy (London–Capital Markets), Simon Letherman (London–Tax), counsels Séverine de La Courtie (Paris–Capital Markets) and Anne-Sophie Maes (Paris–Tax), and associates Amandine Souin, David Saint-Onge (Paris–Capital Markets), Charles Filleux-Pommerol (Paris–Tax) and Michael Ward (London-Tax).

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