UK - The BT Pension Scheme's estimated £5.5bn deficit is "manageable" due to its large cash flows, claim City analysts.
A report by Dresdner Kleinwort Wasserstein on pension provision among the world’s largest companies says the deficit is manageable as it is small relative to the group’s total asset base and future free cash flows.
The report suggests that BT’s forecasted cash flow, of between £1bn and £1.5bn in 2002, should easily accommodate any required additional BT contributions.
The investment bank added: “For the time being, we believe concerns over BT’s pension deficit are much more likely to have an impact on sentiment rather than BT’s underlying credit quality.”
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