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Cable & Wireless sets out proposals for its demerger

Cable & Wireless (C&W) said yesterday it will raise a $500m (£314m) bond and inject an extra £30m into its pension fund as the UK’s second-largest fixed-line telecoms group finalises its demerger.

Cable & Wireless, which has a 138-year history, plans to begin trading as two companies on 26 March.

One unit becomes Cable & Wireless Worldwide (CWW), a UK-focused business serving corporate customers. The other business, Cable & Wireless Communications (CWC), will focus on clients in the Caribbean, Monaco, Panama and Macao.

Cable & Wireless said the separate firms will be more streamlined and will offer “further value for shareholders”.

Current Cable & Wireless shareholders will receive one share in each of the two separate companies.
Also, Cable & Wireless reiterated that CWW was on course to make operating profits of between $880m and $900m this year, while CWC is in line to produce an operating profit of £430m.

It added that investors would receive a total dividend of 9.5p per share this year.

Analysts say both units are likely to debut with a market capitalisation of around £1.8bn each.

Cable & Wireless chairman Richard Lapthorne said: “Both businesses have clear and distinct strategies and we believe the demerger will create further value for shareholders by enabling them to invest directly in Cable & Wireless Communications and Cable & Wireless Worldwide.”