Australia’s TPG Telecom to sell mobile tower assets for $670m to reduce debt

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Australian broadband provider TPG Telecom Ltd said on Monday it would sell its mobile tower and rooftop infrastructure assets to Canadian-based OMERS Infrastructure Management Inc for A$950 million ($670 million).

The sale of the passive infrastructure assets, which include more than 1,200 sites and represent nearly one-fifth of TPG’s mobile network footprint, will generate net cash proceeds of A$890 million, which will be used to repay bank debt, he said.

Passive infrastructure includes sites, buildings, towers, masts and poles, and excludes the digital capabilities of active telecommunications networks.

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“The transaction represents competitive long-term financing, which will reduce our total financial leverage and reduce borrowing costs,” said TPG Chief Executive Iñaki Berroeta.

The sale is the latest in a string of deals in Australia’s telecoms sector, where companies are increasingly looking at options for their aging infrastructure to reduce debt and try to capitalize on growing demand. 5G.

Last year, the country’s largest telecommunications company, Telstra, agreed to sell a 49% stake in its mobile tower business for A$2.8 billion. Last month, Uniti Group also agreed to a 3.6 billion Australian dollar takeover.

Toronto-based OMERS had C$32 billion ($24.8 billion) in assets under management and investments in 12 countries at the end of last year, according to its website.

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The deal marks OMERS’ first wholly-owned Australian investment and its first foray into digital infrastructure in the Asia-Pacific region. He has already invested in the German fiber wholesaler Deutsche Glasfaser and in the French XP Fibre.

“Australia and Asia Pacific more broadly are priority markets for OMERS, where we continue to see significant investment opportunities,” OMERS said in a statement.

TPG said it would recognize a gain of around A$350-400 million after tax on the deal.

The deal is subject to approval by Australia’s Foreign Investment Review Board and is expected to close in the third quarter of fiscal 2022, TPG added.

Shares of TPG were trading roughly flat at A$5.54 at 0021 GMT, while the broader market fell nearly 1%.

($1 = A$1.4178) ($1 = C$1.2915) (Reporting by Himanshi Akhand in Bengaluru; Editing by Daniel Wallis, Kim Coghill and Kenneth Maxwell)

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