HomeFinancial/RegulationTelenor raises €1 billion to build Fiber out and buy shares back...

    Telenor raises €1 billion to build Fiber out and buy shares back in


    Telco raises funds selling 30% of Telenor Fiber to KKR & co

    Norwegian telco Telenor has released details of how it intends to buy back shares and fund a fibre building programme. The telco said it will sell a 30% stake in its Norwegian fibre broadband unit for 10.8 billion Norwegian crowns (€1.0 billion) to a consortium led by US investment firm KKR and Oslo Pensjonsforsikring. Around 30% of the proceeds from the stake sale will be used for share buybacks, Telenor said. “This transaction highlights the value in our infrastructure, strengthens our financial position and unlocks capital to support continued high fibre roll-out in Norway,” said Telenor Chief Financial Officer Tone Hegland Bachke.

    Telenor Fiber was recently split off from the telco into a separate unit holding the group’s passive fibre assets in Norway, including 130,000 km (81,000 miles) of cables connecting more than 560,000 homes. Earlier this year, Telenor initiated a process of evaluating the establishment of a passive fibre infrastructure ownership company with a minority co-investor. “Telenor has now reached an agreement to divest 30 percent of the newly established company,” said the statement. The new company will still be majority owned by Telenor which maintains control of both the operations and processes in the company, it said.

    The company’s assets will be transferred from Telenor Norway in a demerger process prior to completion of the transaction. Telenor Norge will be the company’s only customer and all operational processes remain under full Telenor control. “Telenor has conducted an extensive consultation process with the relevant government authorities, who have given their overall feedback that the transaction safeguards critical security and regulatory considerations,” it said.

    The agreed sales price represents an enterprise value for the Norwegian fibre business of €3.4billion (NOK 36.1 billion), resulting in proceeds of approximately €1 billion (NOK 10.8 billion) to Telenor. The business generated a proforma EBITDA of €1.62 billion (NOK 1.7 billion in 2021. “This transaction highlights the value in our infrastructure and unlocks capital to support continued high fibre roll-out in Norway,” said Telenor Group CFO Tone Hegland Bachke, “Telenor will propose that parts of the proceeds are used for share buy backs.”

    “We look forward to strengthening Norwegian fibre infrastructure,” said Lars Haram, Chief Investment Officer at Oslo Pensjonsforsikring. “We are very excited to be investing long-term capital behind Norwegian infrastructure. KKR has significant experience within telecom infrastructure investing and we look forward to supporting Telenor with its fibre strategy in Norway,” says Julian Barratt-Due, Director of European Infrastructure at KKR.