C&W sells troubled unit for £21m

The telecoms group Cable & Wireless yesterday agreed to sell its loss-making US retail voice customer base for a maximum of $32m (£21m) of cash in a move that will see some 450 staff made redundant.

The telecoms group Cable & Wireless yesterday agreed to sell its loss-making US retail voice customer base for a maximum of $32m (£21m) of cash in a move that will see some 450 staff made redundant.

The deal, part of a wider restructuring of C&W's US business, will see the customer base transferred to Primus Telecommunications. The $32m is payable over a two-year period and the deal, which is subject to regulatory approval, is expected to close by January.

The sale comes just days ahead of a C&W trading statement. The company refused to comment.

Analysts estimated that the US voice business was losing about £100m a year and predicted it would cost C&W £100m to £300m to close it down. "There are around 450 employees at the part of the business being sold, who are not being transferred. There will therefore still be a restructuring cost to take account of these redundancies," analysts at Lehman said.

C&W reiterated yesterday that the sale was part of the restructuring announced in May that will leave it focused on internet services in the region and said it would update investors in more depth in November.

But shares in the company closed down 3 per cent, or 4p, at 142.5p after investors fretted its trading statement could yield yet more bad news. "We are not expecting much in the way of good news and remain cautious towards the stock," analysts at Cazenove said.

C&W is widely expected to scale back its capital expenditure to conserve its estimated £2.4bn cash pile.