C&W pays £380m to Revenue
Cable & Wireless last week reached an agreement with the Inland Revenue to pay £380m to settle tax liabilities in relation to a decade of acquiring and selling companies.
The settlement includes the disputed tax liability when it sold mobile phone operator, One2One (now T-mobile), to Deutsche Telecom in 1999. Under the terms of the deal, C&W was forced to pick up the bill for future tax liabilities.
But the City was outraged late last year when it learned the telecoms operator had agreed to ring fence £1.5bn of its cash pile against any tax liabilities. The bargain £380m settlement revived C&W’s liquidity situation, settling most analyst concerns. Following the news, C&W shares instantly surged from 13.25p to 73.25p.
Many predict the company will embark on another restructuring of its global business as soon as a replacement is found for chief executive GrahamWallace, who resigned in January. A spokesman for C&W declined to comment on the timing of such an appointment.