Justine Smythe (Spark)
Credit: Supplied
Spark NZ has completed the sale of a 70 percent interest in its TowerCo business to the Ontario Teachers’ Pension Plan Board.
The $900 million transaction was conditional on Overseas Investment Office approval, which the telco told shareholders today had now been received.
Spark previously announced its intention to return up to $350 million to shareholders following the completion of the TowerCo sale, through an on-market share buy-back.
The Spark board will now determine the process and timing for the buy-back and will update the market in due course. This will be dependent on market conditions, and Spark may investigate alternative return opportunities if required.
Spark’s TowerCo business maintains about 1263 sites, with the transaction valuing the entire business at $1.175 billion, according to Spark.
Under the terms of the deal, Spark has entered into a 15-year agreement with TowerCo, with rights of renewal, to secure access to existing and new towers, with a commitment to build 670 sites over the next 10 years.
Spark will continue to determine how its mobile network is developed, including where and when capacity investments occur, with TowerCo then designing and deploying these build programs.
Spark will remain the anchor tenant and retain its 30 percent stake in TowerCo as a key strategic partner, while also continuing to own all the ‘smarts’ of the network, such as radio equipment and spectrum.
Spark New Zealand chair Justine Smyth said in July the establishment of TowerCo accelerated Spark’s strategic objective of delivering a smart, automated network, while maximizing value for shareholders.
In July, Vodafone NZ and its institutional shareholders announced the sale of the telco’s 1,484 passive mobile tower network for $1.7 billion.
The buyers, subject to approvals and conditions, were a consortium of funds managed or advised by global investors InfraRed Capital Partners (40 per cent), Northleaf Capital Partners (40 per cent) and NZX-listed Infratil (20 per cent).
Tags mobileVodafone2degrees mobilesparkTowerCoOntario Teachers Pension Plan Board
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