TPG Telecom has sold the last of its fully-owned tower assets across Australia to investment firm and asset manager OMERS Infrastructure Management for $950 million.
The telco will sell 1,237 tower asset sites, which includes 428 towers and 809 rooftop sites, and comprises 21 percent of its total mobile network footprint.
The sale also comes after TPG signed a multi-year network sharing deal with Telstra in February, which is set for potentially up to 20 years.
"We are delighted to have concluded the strategic review of these assets with such a strong outcome for TPG Telecom shareholders. The transaction represents competitive long-term financing, which will reduce our total financial leverage and deliver lower borrowing costs,” TPG Telecom chief executive and managing director Iñaki Berroeta said.
“The tower sale demonstrates the disciplined approach we are taking to asset utilisation and capital allocation as we pursue opportunities to unlock value and maximise our potential for customers and shareholders. It builds on the landmark multi-operator core network (MOCN) agreement we announced in February of this year to enable regional network sharing with Telstra (subject to regulatory approval).
“We are excited to welcome OMERS as a strategic partner and long-term custodian of these mobile network sites. We look forward to working with OMERS to transition the business and then to support its growth as it provides critical telecommunications infrastructure services to our customers and the broader Australian telecommunications sector.’’
In addition to the sale, TPG has also signed a master services agreement with OMERS for a 20-year term and an option to extend.
Included in the 1,237 tower asset sites are 120 sites in non-metropolitan locations that are set to have their active equipment decommissioned once the deal is completed.
TPG said the transaction would bring net cash proceeds of approximately $890 million (enterprise value minus total transaction costs), which the company expects to repay existing bank debt.
The telco estimates it would recognise an accounting gain on sale from the transaction of approximately $350 million to $400 million after tax
TPG’s multi-operator core network (MOCN) agreement with Telstra will see its network expand through the access to around 3700 Telstra cellular towers in regional Australia and on urban fringes. As part of the deal, the telco will decommission 725 mobile sites it currently operates in the zone covered by the Telstra agreement.