Telstra has sold a 49 percent stake in its mobile tower infrastructure subsidiary for $2.8 billion to a consortium of the Australian Government Future Fund, Commonwealth Superannuation Corporation and Sunsuper.
The InfraCo Towers business was set up as part of a massive corporate restructure last year, and is home to approximately 8200 telecommunications towers.
Telstra CEO Andy Penn said the telco had brought forward the monetisation of the towers business after receiving an expression of interest from the consortium.
“We had previously intended to commence the process to seek external strategic investment in the towers business in early FY22, with a view to completing any transaction by the end of the 2022 calendar year,” Penn said.
“We were approached by the consortium earlier in the year as they recognised the value of these assets and provided a compelling rationale to progress the transaction ahead of schedule.
“We believe the value of the transaction; the high calibre consortium members and the terms of the agreement which protect Telstra’s network differentiation, support our decision to accelerate the process.”
The price paid for a 49 percent stake values the towers business altogether at $5.9 billion.
Of the $2.8 billion paid by the consortium, Telstra said it would return half of that to shareholders; and invest $75 million “to further enhance connectivity in regional Australia”.
“The remainder of the proceeds will be used for debt reduction to ensure we maintain balance sheet strength and flexibility,” Penn said.
“This level of debt reduction is important to deliver a broadly neutral credit outcome given the long-term Tower access obligations created by the transaction.”
More to come