AT&T's Strategic Restructuring Won't Impact AT&T Capital Partnership

Strategic Insights -

AT&T has announced plans to restructure its businesses and sell its remaining 86% interest in AT&T Capital Corporation, a diversified equipment leasing and finance company. However, this move will not affect the ongoing business relationship between AT&T and AT&T Capital, which has been formalized through an operating agreement since 1993. This agreement ensures that AT&T Capital will continue to provide financing services to AT&T, as it has since 1985.

Key Takeaways:

  • The operating agreement between AT&T and AT&T Capital, entered into in 1993, formalizes the strong and mutually beneficial commercial relationship between the two companies.
  • The agreement ensures that AT&T Capital will continue to provide financing services to AT&T, as it has since 1985, and will remain in place until the year 2000 with the option to renew.
  • The restructuring plans will not impact the existing partnership between AT&T and AT&T Capital, with AT&T Capital remaining as the preferred provider of financing services to the newly created equipment and computer companies.
  • Thomas C. Wajnert, AT&T Capital's chief executive officer, emphasizes the company's ability to meet market tests and provide highly responsive and competitive customer financing.
  • Richard W. Miller, AT&T executive vice president and chief financial officer, states that AT&T Capital will have comprehensive operating agreements with three dynamic and well-positioned businesses, including AT&T.

Statistics:

  • AT&T plans to sell its remaining 86% interest in AT&T Capital Corporation.
  • The operating agreement between AT&T and AT&T Capital runs until the year 2000 and can be renewed after that.
  • AT&T Capital has been providing financing services to AT&T since 1985.
  • The agreement was formalized in 1993 through an operating agreement between AT&T and AT&T Capital.

Sources:

  • AT&T (NYSE: T)
  • PRNewswire ( press release, October 10, 1995)
  • AT&T Capital Corporation (NYSE: TCC)
  • Dick Gray of AT&T
  • David Caouette of AT&T Capital Corp.