Deutsche Glasfaser secures €5.75 billion in new financing

German fibre operator, Deutsche Glasfaser, has announced this week that it has received fresh investment to the tune of €5.75 billion from a consortium of banks and pension funds. 

 

The deal comprises a €3 billion loan, a capex facility of €2.5 billion, and a revolving credit facility worth €250 million. As part of the agreement, Glasfaser can later expand the line of credit by a further €1.5 billion via an accordion agreement, if they so choose.

 

Interestingly, all these facilities have interest rates linked to environmental, social and corporate governance (ESG) targets, including reductions in carbon emissions, rolling out infrastructure to underserved regions, and even employee satisfaction surveys.

 

Axa IM Alts, Generali Global Infrastructure, Kommunalkredit, LBBW, and National Bank of Austria make up the consortium.

 

Glasfaser says it will use the funds to rapidly accelerate its rollout, which is targeting 6 million fibre-to-the-premises (FTTP) connections, with 4 million of these set to be complete by 2025. At present, the company is rolling out fibre around 400,000 homes ever year but hopes to increase this number to 800,000 per year in 2025.

 

In total, Glasfaser intends to invest around €7 billion in German fibre over the next four years.

 

“This financing already ensures that we can continue to pursue this plan in the years to come and allows us to increase our pace of expansion. At the same time, the transaction will improve our financial flexibility,” explained Jens Müller, CFO of Deutsche Glasfaser.

 

The start of December has been an exciting time for Glasfaser, who said last week that they had entered into a strategic agreement with Geodesia, the infrastructure construction arm of Altice Group, who will help to plan and deploy one million of their targeted FTTP connections by 2025.

 

“As a digital provider for the regions, we are promoting the nationwide coverage of rural and suburban areas with fibre optics. Thanks to the partnership with Geodesia, we can further accelerate our high speed of fibre optic expansion. Geodesia is a highly specialised construction partner with many years of experience in the expansion of fibre optics and the highest quality standards. We look forward to jointly supplying our customers with future-proof infrastructure quickly and reliably,” said Thorsten Dirks, CEO of Deutsche Glasfaser.

 

The deal represents Altice Group’s first steps in the German market.