Concert split hampered

July 5, 2001 Posted: 0819 GMT

LONDON (CNN) -- A lack of agreements between BT and AT&T is hampering attempts to dissolve their loss-making joint venture, Concert, a report said on Thursday.

British Telecommunications and AT&T of the U.S. are in a quandary because of an absence of "pre-nuptial" agreements over which side should inherit key assets and customers, the Financial Times reported.

Beleaguered BT, already struggling with huge debts and disgruntled investors who have seen the company's share price plunge in the last year, is now likely to face more reductions in its asset value because of the failed venture.

BT (BT-A) recently valued its share of Concert, which was established to serve large multinational business customers, at £1.4 billion ($2 billion).

London-based BT has already taken a £3 billion accounting charge to reflect a fall in the value of investments in Germany.

The management of BT and AT&T  (T: Research, Estimates) decided last week to examine ways of dissolving concert after nearly a year of talks aimed at either expanding it or selling BT's 50 percent stake to its U.S. counterpart.

The two options are considered to be the best of a poor batch aimed at stemming operating losses running at more than £150 million a quarter.

But they have hit a stumbling block because of the absence of any formal mechanisms for deciding who receives valuable international infrastructure and customer accounts.

The Financial Times said advisers must negotiate the future of each separate asset, including more than 75,000km of fibre optic cable, 21 joint ventures reaching 230 countries, and 28 billion minutes of voice traffic.

The two telecom giants invested a further $1bn in new technology and opened a headquarters with more than 400 staff after linking up last year.

Mark Cardwell, a former AT&T executive involved in organising the deal, told the newspaper the lack of a "pre-nuptial agreement" was intended to ensure both companies were fully committed to the partnership.

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