AOL TW Mulls Asset Disposal

08 October 2002

AOL Time Warner is mulling the auction of some of its non-core units in a bid to retain its present credit rating.

The ailing media mammoth has so far convinced ratings agencies not to downgrade it, pointing to a forthcoming IPO of Time Warner Cable. Proceeds from the offering, scheduled for next year, will be used to cut AOL TW’s $30 billion (€30.6bn; £19.2bn) debt mountain.

However, should cable stocks and the markets in general fail to improve, the IPO could be delayed – the prospect of which has encouraged executives to find alternative ways of raising cash.

Consequently, a number of properties have been nominated as candidates for disposal. These include AOL TW’s stakes in cable channels Comedy Central and Court TV, joint ventures respectively with Viacom and Liberty Media. They are expected to fetch around $1bn.

Also earmarked for disposal are a group of sports teams in Atlanta – the Braves (baseball), the Hawks (basketball) and the Thrashers (hockey) – expected to realize over $1bn in total. However, the media giant’s vice-chairman Ted Turner, whose empire once included these teams, may oppose the sale.

Other interests being considered for sale are DC Comics and the stake in internet service provider AOL Latin America.

Data sourced from: Financial Times; additional content by WARC staff