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A consortium including the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper, will become a strategic partner in Telstra InfraCo Towers after acquiring a 49% stake
Today, Telstra has announced the sale of a 49% stake in its infrastructure company, InfraCo Towers, for AU$2.8 billion.
The move will see the purchasing consortium, headed by the Australian sovereign wealth fund, Future Fund, take a 49% stake in the business, which currently operates around 8,200 towers across Australia.
Once the deal closes, InfraCo Towers will have no debt and Telstra will have a 15-year deal with extension options to use the infrastructure.
Completion of the deal is expected in the first quarter of 2022, with Telstra saying they will spend around AU$75 million on expanding network coverage and return half of the net profits from the deal to shareholders.
“Telstra’s objective in seeking a strategic partner has been to maximise overall value for our shareholders, maintain control of the assets and agree terms that secure Telstra’s mobile network leadership and competitive differentiation into the future,” said Telstra CEO Andy Penn.
“The increased commercial focus on Towers since its establishment as a standalone business within Telstra is already delivering efficiencies and we look forward to working with our partners to sustain its market leadership over the long term through investment in new infrastructure and services, availability of competitive market offerings, and leveraging new technology to improve speed and efficiency.”
The move comes as yet another part of Telstra’s wider restructuring that has taken place over the past few years, which has seen major cost cuttings throughout the business, including the loss of some 8,000 jobs. This is by no means the end either – back in March, Penn said that similar spin offs, and sales were being planned for the company’s fibre and data centre assets.
Investors’ appetite for telecoms infrastructure is soaring right now, with major deals being made all over the world. Telstra note that they were in fact initially planning to seek external investment in the InfraCo in early FY2022 but decided to fast track the process having been independently approached by the Future Fund consortium earlier this year.
Telstra is not the only Australian operator to be looking to monetise its tower assets. An auction for a controlling stake in Optus’s Australian Tower Network (ATN) is planned to take place later in the year. This is a deal on a much smaller scale, however, since ATN only owns around 2,132 towers and rooftop sites, with another 565 sites to be developed in the near future.
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