Altice said it expects to raise $2.9 billion through the sales of stakes in its businesses in these two countries
Dutch-based telecoms and cable group Altice plans to raise 2.5 billion euros ($2.9 billion) through the sale of stakes in its telecoms towers businesses in France and Portugal to reduce its debt.
Altice Europe said its subsidiary Altice France has entered into an exclusivity agreement with U.S. firm KKR to form a new French company called SFR TowerCo, which will have assets including 10,198 sites operated by Altice’s French subsidiary SFR. The private equity firm will have a 49.9% stake in the new firm.
The proposed transaction values SFR TowerCo at an enterprise value of €3.6 billion. In addition, a build-to-suit agreement for 1,200 new sites between SFR and SFR TowerCo is expected to generate approximately €250 million in additional proceeds to SFR within the next four years.
Under the terms of the agreement, which is subject to regulatory approvals, SFR and KKR would partner to operate and develop the largest independent tower company in France.
The transaction is expected to be closed in the last quarter of this year.
In Portugal, Altice’s local subsidiary PT Portugal has reached an agreement with a consortium including Morgan Stanley Infrastructure Partners and Horizon Equity Partners for the sale of 75% in a new company dubbed Towers of Portugal (ToP). The new company will own 2,961 sites currently operated by Altice Portugal. The transaction values Towers of Portugal at an enterprise value of €660 million. The deal also includes a build-to-suit agreement for 400 new sites between Portuguese carrier MEO, owned by Altice and ToP, which is expected to generate approximately €60 million in additional proceeds to MEO within the next 4 years.
The transaction has been structured on the grounds of a long-term partnership between PT Portugal and Towers of Portugal, while PT Portugal will reinvest to hold a 25% financial stake alongside the consortium, Altice Europe said.
The transaction, which also is subject to regulatory approvals, is expected to close during the third quarter of 2018.
Altice said that the two transactions, once realized, will generate significant proceeds for Altice Europe and that the future tower companies, whose perimeter will include passive infrastructure and equipment, will be well-positioned to offer shared passive infrastructure services needed to support the expansion in France and Portugal of wireless services using 4G/5G technologies. Altice also said that services will be available to all mobile network operators in France and Portugal.
“Both tower businesses will be uniquely positioned to grow as they provide increasingly important infrastructure services to operators in both markets. Simultaneously, these transactions underline our commitment to deliver and proactively manage our balance sheet while highlighting the significant underlying value of Altice Europe’s business,” Altice founder Patrick Drahi said.
In related news, Altice USA announces that Jean-Charles Nicolas has joined the company as senior vice president for Altice Mobile.
The recently appointed executive will lead the development, launch, and ongoing market strategy for Altice USA’s mobile service, which is expected to be available by 2019. Nicolas will be responsible for the end-to-end mobile customer experience, including operations, marketing, sales, and customer care.
Altice USA’s mobile offering will be powered through the company’s MVNO agreement with Sprint, which was announced late last year.
Earlier this month, Altice USA completed the separation from Altice NV. Following the separation, Altice NV has changed its name to Altice Europe NV.
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