Bell Atlantic Dispose Of CWC Shares

Bell Atlantic appears to have adopted a rather innovative method of disposing of its shares in Cable & Wireless Communications. The company will be issuing in excess of $3bn in convertible bonds, which can either be held onto by investors or converted into CWC shares. This also means that Bell Atlantic will remain on the board of directors.

With this method, there will be no dilution of existing shareholders as a result of no new equity being issued. As well as this, the fact that investors will be unable to exchange the bonds for equity until 3 1/2 years have elapsed means that current equity holders will be protected against a potential ‘slow drip’ of new equity over the short and the medium term.

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