British Telecom has agreed to allow Norwegian telecoms company Telenor to postpone a decision on what to do with its 49.5 per cent stake in Esat Digifone.

Telenor had been expected to announce its plans for its Digifone stake by Thursday but, under a new agreement, a decision is not now expected until February.

A Telenor spokesman said yesterday the company had asked BT for an extension to the December deadline as management had been busy preparing its initial public offering earlier this week.

"We have agreed to give it another two months and all three options still hold," he said.

Under the terms of BT's acquisition of Esat Telecom last February, Telenor can:

choose to sell its stake for $1.24 billion (€1.4 billion);

convert it into a 33 per cent stake in Esat Telecom, or;

convert it into Esat shares and exercise an option to buy an additional 16.99 per cent of Esat Telecom at $624 million, raising its holding to 49.99 per cent.

A BT spokeswoman confirmed the company had granted an extension to Telenor. "It was the appropriate thing to do as it's not in anyone's interest to rush the decision."

Esat Digifone would not comment on the matter.

A two-month delay is likely to suit BT, which is engaged in a major restructuring process. Yesterday it sold $10 billion of bonds in the largest dollar-denominated and second largest corporate bond sale ever.

The company will use the funds to help it pay down shortterm debt it took on largely to buy third-generation mobile phone licences.

BT's bonds yielded about 0.2 to 0.3 percentage points more than similar paper.