AT&T will unload its stake of 48.9 million shares of Cablevision in a plan meant to avoid diluting the stock and allow AT&T to raise cash to improve its balance sheet.
Cablevision will amend its May 30 Securities and Exchange Commission filing and allow AT&T to sell up to $1 billion worth of its Cablevision stock, which equates to 19 million shares at current prices.
Cablevision will file a registration statement with the SEC in March 2002 that permits AT&T to sell its remaining Cablevision stake.
AT&T acquired a stake in Cablevision through its $55 billion purchase of Tele-Communications Inc. in March 1999.
Because the stake was private, AT&T could not sell the stock until it was registered with the SEC by Cablevision, which would see a sharp dive in its stock price if AT&T unloaded its stake in a very short time frame.
The deal also states that Cablevision will file a registration statement by Oct. 1 to allow AT&T to sell its 24.5 million shares of Rainbow Media Group, a Cablevision tracking stock.
AT&T reported $46.5 billion worth of debt at the end of its second quarter.