TELUS Corporation (“TELUS”, the “Company” or “we”) (TSX-T, NYSE-TU)
announced today that it has entered into an agreement with a
syndicate of underwriters led by RBC Capital Markets and CIBC
Capital Markets, and together with BMO Capital Markets, Scotiabank
and TD Securities Inc. as joint book runners (collectively, the
“Underwriters”), pursuant to which the Underwriters have agreed to
purchase from TELUS, on a bought deal basis, and sell to the
public, 51,300,000 common shares of TELUS (the “Common Shares”) at
a price of C$25.35 per Common Share (the “Offering Price”) for
gross proceeds of approximately C$1.3 billion (the “Offering”).
TELUS has granted the Underwriters an
over-allotment option, exercisable in whole or in part for a period
of 30 days following the closing of the Offering, to purchase up to
an additional 7,695,000 Common Shares at the Offering Price. If the
over-allotment option is exercised in full, the gross offering size
would increase to approximately C$1.5 billion.
TELUS intends to use the net proceeds from this
Offering to further strengthen the Company’s balance sheet and,
principally, to capitalize on a unique strategic opportunity to
accelerate its broadband capital investment program, including the
substantial advancement of the build-out of TELUS PureFibre
infrastructure in Alberta, British Columbia and Eastern Quebec, as
well as an accelerated roll-out of the Company’s national 5G
network.
The Company anticipates that approximately C$500
to C$750 million of the accelerated capital investments will be
earmarked for 2021, over and above its previous target of C$2.75
billion, dependent upon its ability to ramp up resources and
suppliers. The balance of approximately C$750 million to C$1
billion is expected to be brought forward into 2022, in addition to
TELUS’ planned annual capital expenditures of C$2.75 billion for
next year. Investing from a position of strength and leadership,
this accelerated broadband expansion program will significantly
enhance TELUS’ fibre buildout across key markets in British
Columbia, Alberta and Eastern Quebec, as well as advance
investments related to the expansion of our 5G footprint, including
network readiness for 5G spectrum and system upgrades.
These transformational investments are expected
to significantly bolster TELUS’ customer experience leadership and
competitive position, enabling up to 225,000 additional rural and
urban premises with its fibre technology, and enhancing the speed
and coverage of its leading wireless network through the
accelerated build-out of 5G. These generational investments are
expected to drive enhanced customer growth and the realization of
accelerated operating efficiencies, including advancing its copper
decommissioning plans.
These investments will also result in positive
cash flow benefits, as TELUS completes the accelerated build,
including a faster than expected reduction in capital expenditures
in outer years. With the expected completion of the stepped-up
broadband build in 2022, we anticipate normal course annual capital
expenditures, excluding spectrum purchases, to decline by at least
C$250 million, to approximately C$2.5 billion or less, beginning in
2023.
TELUS expects this accelerated and opportunistic
broadband program to significantly support elevated revenue growth
and enhanced efficiencies resulting in incremental flow-through to
EBITDA in future years. TELUS is reviewing its annual consolidated
guidance to take into account the use of proceeds from this
offering and will update it, as required, with the release
of its first quarter 2021 results, on May 7, 2021.
In respect of the Offering, a prospectus
supplement (the “Prospectus Supplement”) to the Company’s Canadian
base shelf prospectus (the “Base Prospectus”) dated May 13, 2020
will be filed in Canada with applicable securities regulatory
authorities, as well as in the United States with the Securities
and Exchange Commission (the “SEC”) under the Company’s U.S.
registration statement on Form F-10 which became effective on May
13, 2020.
Completion of the Offering is subject to
customary conditions and the receipt of all necessary stock
exchange approvals, including the approvals of the TSX and the
NYSE. Closing is expected to occur on or about March 31, 2021.
This media release does not constitute an offer
to sell or the solicitation of an offer to buy the Common Shares,
nor shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Prospective investors should read the Base
Prospectus, Prospectus Supplement and the documents incorporated by
reference therein before investing in the Common Shares. These
documents may be accessed for free by visiting SEDAR at sedar.com
or EDGAR at sec.gov. Alternatively, TELUS, any underwriter or any
dealer participating in the Offering will arrange to send you the
prospectus or you may request it in Canada from RBC Dominion
Securities Inc., 180 Wellington Street West, 8th Floor, Toronto, ON
M5J 0C2, Attention: Distribution Centre, Phone: (416) 842-5349,
Email: Distribution.RBCDS@rbccm.com or from CIBC Capital
Markets, 161 Bay Street, 5th Floor, Toronto, ON M5J 2S8 by
telephone at 1-416-956-6378 or by email at
Mailbox.CanadianProspectus@cibc.com, or in the United States from
RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, NY
10281-8098, Attention: Equity Syndicate, Phone: 877-822-4089,
Email: equityprospectus@rbccm.com or from CIBC Capital Markets, 161
Bay Street, 5th Floor, Toronto, ON M5J 2S8 by telephone at
1-416-956-6378 or by email at Mailbox.USProspectus@cibc.com.
Forward-Looking StatementsThis
news release contains statements about future events and plans of
TELUS that are forward-looking, including the anticipated benefits
and efficiencies of the accelerated investments in fibre and 5G,
the timing of the accelerated investment program in 2021 and
completing it by the end of 2022, plans for future annual capital
expenditures to decline including expected cash flow, revenue and
EBITDA growth resulting from the accelerated investments, the
expected closing date of the Offering, the filing of the Prospectus
Supplement, any exercise of the over-allotment option granted to
the Underwriters, and the amount and intended use of the net
proceeds of the Offering that are forward-looking. By their nature,
forward-looking statements require us to make assumptions and
predictions and are subject to inherent risks and uncertainties.
There is significant risk that the forward-looking statements will
not prove to be accurate. The timing and closing of the
above-mentioned offering are subject to customary closing
conditions and other risks and uncertainties. Readers are cautioned
not to place undue reliance on forward-looking statements as a
number of factors could cause actual future performance and events
to differ materially from those described in the forward-looking
statements. Accordingly, this news release is subject to the
disclaimer and the qualifications and risk factors as set out in
TELUS’ 2020 annual management’s discussion and analysis and in
other TELUS public disclosure documents and filings with securities
commissions in Canada (on SEDAR at sedar.com) and in the United
States (on EDGAR at sec.gov). The forward-looking statements
contained in this news release describe TELUS’ expectations at the
date of this news release and, accordingly, are subject to change
after such date. Except as required by law, TELUS disclaims any
intention or obligation to update or revise forward-looking
statements.
ABOUT TELUSTELUS (TSX: T, NYSE:
TU) is a dynamic, world-leading communications technology company
with $16 billion in annual revenue and 16 million customer
connections spanning wireless, data, IP, voice, television,
entertainment, video, and security. We leverage our global-leading
technology and compassion to enable remarkable human outcomes. Our
longstanding commitment to putting our customers first fuels every
aspect of our business, making us a distinct leader in customer
service excellence and loyalty. In 2020, TELUS was recognized as
having the fastest wireless network in the world, reinforcing our
commitment to provide Canadians with access to superior technology
that connects us to the people, resources and information that make
our lives better. TELUS Health is Canada’s leader in digital health
technology, improving access to health and wellness services and
revolutionizing the flow of health information across the continuum
of care. TELUS Agriculture provides innovative digital solutions
throughout the agriculture value chain, supporting better food
outcomes from improved agri-business data insights and processes.
TELUS International (TSX and NYSE: TIXT) is a leading digital
customer experience innovator that delivers next-generation AI and
content management solutions for global brands across the
technology and games, ecommerce and FinTech, communications and
media, healthcare, travel and hospitality sectors. TELUS and
TELUS International operate in 25+ countries around the world.
For more information, please
contact:
Investor RelationsRobert
Mitchell(647) 837-1606ir@telus.com
Media RelationsSteve
Beisswanger514-865-2787Steve.Beisswanger@TELUS.com
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