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BT Group close to appointing advisers for sale-and-leaseback deal for its London headquarters

Published: 14:56 09 Jul 2018 BST

BT building
The newspaper said the company is expected to seek £200mln from a three-year leaseback deal

BT Group plc (LON:BT.) is close to appointing advisers to prepare a sale-and-leaseback deal for its London headquarters at St Paul's site, The Times newspaper has reported.

The FTSE 100-listed telecoms giant is preparing to sell off its HQ after almost 150 years in London as part of its restructuring plans to cut £1.5bn of costs within three years.

READ: BT Group shares drop as it slashes 13,000 jobs and revenues fall, but dividend maintained

The newspaper said the company is expected to seek £200mln from a three-year leaseback deal as it takes advantage of a resilient UK commercial property market.

BT announced back in May that it would move out of central London at the same time as it said it would axe approximately 13,000, mainly middle-management jobs over the next three years.

The City property market has attracted record investment since the Brexit vote in 2016, companies such as UBS and Goldman Sachs have also decided to sell their headquarters.

The telecoms giant’s chief executive Gavin Patterson said the restructuring, which comes after a tough 2017 including an accounting scandal in Italy, would focus the firm on the essential services needed by consumers and businesses.

The strategy changes came as the group also reported its full-year results showing a 3% drop in fourth-quarter revenue to £5.967bn, just missing analysts' expectations, while core earnings rose by 1% to £2.083bn

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