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Saturday, January 28, 2023

Vodafone applies to take over 50% of Telefonica’s tower subsidiary in the UK

Vantage TowersVodafone Infrastructure Division, wants to take control of the cornerstone, the ‘joint venture’ of telephone towers that it maintains with Telefónica in the United Kingdom. company Spanish operator faces pressure to consolidate over 7,000 towers in the country, It analyzes potential sales with its partner Liberty Global. It is the last relevant tower property to be held by US giant American Tower after last year’s delivery of the best sites in Europe and Latin America.

“We believe this is a relevant asset for us and strengthening Cornerstone would be a good step forward for Vantage”, assured Vivek Badrinath, the division’s CEO, before analysts this week. This is the second time they have pointed this out in recent months, after asserting that they are the “natural buyer” of this 50% of the total shared subsidiary, whose assets are being shared by the two parties at around £2,200 million ( 2,500 million) has been estimated. euro at the current exchange rate). Referring to the entire process of entry of two financial partners (KKR and GIP Fund) into shareholding, the executive said, “There is nothing to stop it.”

It is the only major tower asset for Telefónica that it maintains in its portfolio.After the sale of Telxius in 2020. it is Available to condense the last great ‘jewel’ value, The CEO, Angel Villa, assured two years ago that they were ready for potential profitability. It was a property that gave it “optionality” for the future. Despite everything being ready to close the transaction, it didn’t come through. And the assets remained in Telefónica Infra, the infrastructure division where the towers not transferred to Telexius are located and also the submarine cable whose sale was rejected due to low offers.

partners’ agreement that Telefónica and Vodafone signed at the beginning of last year Leaves everything ready for possible monetization of these assets by one of the two parties, This ‘joint venture’, which controls around 14,000 sites today, was formed in 2012 to centrally manage the towers of the two – and to make the whole deployment more sustainable financially. In 2019 it was expanded to include all investments for ultra-fast 5G networks. The agreement was revised following the merger of the Spanish company with Liberty in the country. why The sale was allowed. but always with the cornerstone as a ‘torrera’ who managed those properties, Therefore, the sites will not be sold but the 50% which does not give control of the company. That is why Vodafone positions itself as a natural buyer.

Valuation of these properties is the most difficult issue, telefonica Its monetization pressure has been lifted following transactions in the United Kingdom and Telexius and fiber operations in Germany, Spain and Latin America. The rush for potential sales is not the same as it was two years ago, The company would like to significantly increase the 1,200 million euros that would correspond to it based on the balance of the ‘joint venture’.

Telefónica is in no rush to sell that 50% stake in the joint venture and wants to maximize the value of the asset

The ‘timing’ of this operation is not easy, Industrial operators such as American Tower or Cellnex are excluded from the main tower transactions against large private equity funds (Vantage Tower and Deutsche Telekom themselves) because they seek to control and manage those assets. In fact these managers may be potential candidates. But further delay could make it difficult for those firms to apply.

The development of Cornerstone’s financial figures has been positive, with Telefónica O2 UK and Vodafone being the two main customers. gross, It generated a revenue of £357 million during the last financial year (410 million euros) with a net loss of £5.8 million, After closing last May, it distributed the first dividend in its history: approximately 35 million euros. Vodafone’s own tower subsidiary reports that revenue during the first two quarters of the current fiscal year (April-September) was 228 million euros.

savings plan

This 50% by purchase vodafone would like Changes in the proposed roadmap in the last two years In which it focuses precisely on the profitability of current assets. The last move was precisely the entry of GIP and KKR funds into Vantage Towers to control 50%, leaving the Spanish Selnex out of the race. They tried it in Spain, with talks with Massamobil for its sale or merger, with no agreement being reached. He did the same in Italy, where he received an offer from Iliad for an €11,250 million subsidiary, which was rejected.

Now, given the demands of investors and with a certain slowdown in the German market (which represents 30% of the group’s income), it has put on the table A new savings plan of 1,000 million euros for the next three years, The group announced after the presentation of the results that it plans to go through the “simplification” of the group that analysts have been demanding. He did not mention any divisions, but these works have already been done in the Spanish subsidiary with the sale of its own stores and the Employment Regulation file (ERE) executed last year.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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