KPN and ABP join forces through new TowerCo
June 05 2024 - 1:30AM
KPN and ABP join forces through new TowerCo
KPN and Dutch pension fund ABP have signed an
agreement to create a new tower company (TowerCo). This strategic
partnership is in line with KPN's ‘Connect, Activate & Grow’
strategy to optimize the value of its passive infrastructure assets
and retain strategic flexibility. It demonstrates KPN’s intent to
optimize shareholder value and continue to operate the best digital
infrastructure in the Netherlands.
With the increasing consumption of data and the
deployment of new technologies, there is an increasing need for a
strong and stable grid of mobile sites providing continuous
coverage in the Netherlands. Following ongoing demand for network
growth and densification, increasing direct exposure to Dutch
passive telecom infrastructure is strategically imperative for
KPN.
TowerCo will hold the passive mobile
infrastructure assets of KPN, as well as those of NOVEC and OTC
(portfolio companies owned by TenneT and ABP respectively), leading
to a portfolio of c. 3,800 towers and rooftops in the Netherlands
and also has received a built-to-suit commitment for the next 10
years from KPN. TowerCo and KPN have entered into a long-term
master service agreement, stipulating the terms under which KPN
will continue to be a tenant of TowerCo for an initial period of 20
years. TowerCo aims to further increase tenancy levels of its
network by providing access to attractive and fully modernized
towers and rooftops.
Through the transaction KPN gains higher
flexibility over a substantial part of its mobile sites, enabling
strategic synergies regarding the deployment, maintenance, and
optimization of the network infrastructure. This flexibility allows
KPN to ensure that its mobile network continues to meet the
performance standards required to deliver high-quality services to
subscribers, to accommodate new technologies, such as 5G, and to
expand coverage into underserved areas. It also allows for the
harmonization of contracts into a futureproof agreement covering
~60% of our tower and rooftop portfolio. As part of the transaction
some of the existing lease terms have been reset.
In this transaction, ABP is represented by its
asset manager APG. KPN will hold a 51% consolidating stake in
TowerCo and ABP the remaining 49%, with TenneT selling its stake in
NOVEC as part of this transaction. KPN has agreed an upfront cash
payment of ~€ 120m to NOVEC/OTC’s current shareholders for the
stake in the company and the amended lease terms, subject to
closing adjustments. On a pro forma, full year basis, the
consolidated impact of the transaction on KPN’s 2024 Adjusted
EBITDA AL would be ~€30m; on a similar basis, the impact on KPN’s
Operating Free Cash Flow would be ~€20m. The transaction has no
impact on employment and is subject to approval by the works
council and regulator. Perella Weinberg acted as financial advisor
to KPN in this transaction.
The accompanying webcast will be held today,
June 5, 2024 at 10:00 CEST. This webcast and related documents can
be accessed via our website ir.kpn.com.
For more information: KPN Royal Dutch Telecom
Investor Relations Wilhelminakade 123 3072 AP Rotterdam
E-mail: ir@kpn.com
Formal disclosures:
Royal KPN N.V. Head of IR: Matthijs van Leijenhorst Inside
information: Yes Topic: KPN and ABP join forces through new
TowerCo05/06/2024KPN-N
- KPN and ABP join forces through new TowerCo
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