Telxius Telecom, subsidiary of Telephone 50% and owned by the fund KKR (40%) and Pontegadea at 10% (Amancio Ortega), has signed an agreement with American Tower Corporation (ATC) for the sale of your telecommunications tower division in Europe (Spain and Germany) and in Latin America (Brazil, Peru, Chile and Argentina), for an amount of 7.7 billion euros, payable in cash.
“The attributable goodwill Telefónica is estimated to be approximately 3,500 million euros. Once the operation is completed, the net financial debt of the Telefónica Group will be reduced by approximately 4,600 million euros and the leverage ratio (Net Debt / OIBDAaL) of approximately 0.3 times“says the operator in a statement sent to the CNMV.
“This operation is part of the Telefónica Group’s strategy, which contemplates, among other objectives, a active portfolio management policy for its businesses and assets, based on the creation of value and accelerating, at the same time, the reduction of organic debt “, he adds.
Bolsamanía published this Monday that investors consulted by Citi they think that “his balance is difficult to repair“, but without a doubt this operation is a great advance for the company to reduce its debt and clean up its balance sheet.
The aforementioned agreement establishes “the sale of a number of, approximately, 30,722 telecommunications tower sites; and comprises two separate and independent transactions (on the one hand, the business of Europe and, on the other hand, the business of Latin America), setting the respective closures once the corresponding regulatory authorizations have been obtained “, specifies the ‘teleco’.
Among other aspects, the aforementioned sale agreement contemplates a employment commitment by ATC. On the other hand, the operators of GrupoTelefónica they will maintain the current leasing contracts for the towers subscribed with the companies sold, subsidiaries of Telxius Telecom, for which said operators will continue to provide their services in terms similar to the current ones.
The renewal conditions do not include any additional ‘all or nothing’ clause. Telxius’ tower business generated a OIBDAaL estimated during the last twelve months of approximately 190 million euros. If this figure is adjusted considering the total impact of the German portfolio acquired by Telxius in June 2020, the Implied multiple over pro forma OIBDAaL would be 30.5 times.
The president of Telefónica, Jose Maria Alvarez-Pallete, points out that “this is an operation that makes strategic sense within our roadmap. American Towers was our second supplier after Telxius.”
Pallete adds that “after this great operation, we will continue to focus on our most ambitious goals: O2 integration with Virgin in the UK, the purchase of Oi’s mobile assets in Brazil and the debt reduction“.
After this operation, American Tower became the Telefónica’s first supplier both in Europe and Latin America, and maintains its status as a partner in strategic projects in Brazil, Argentina and Colombia.