Vodafone announced plans to spin off its tower assets into a new company. The aim is to monetise the assets, either through an IPO or selling a stake to investors, in order to raise money for reducing debt.
The company has already announced recent deals in Italy, Spain and the UK to share network infrastructure, and Vodafone said a review of the entire portfolio shows there are more opportunities for monetisation. These include cost savings for itself as well as income from renting the assets to other companies. The company said it’s already received several offers for various parts of its tower portfolio.
The plan is expected to create Europe’s largest tower company, with over 61,700 towers across 10 countries. Around three-quarters of the sites are in the large markets Germany, UK, Spain and Italy. Vodafone aims to complete the legal separation and have the new TowerCo organisation with a dedicated management team operational by May 2020.
After extensive due diligence, Vodafone estimates that TowerCo could generate proportionate annual revenue and EBITDA of around EUR 1.7 billion and EUR 900 million, respectively. TowerCo’s annual maintenance and expansion capex could be up to EUR 200 million. The final figures will depend on which assets Vodafone decides to include in the company.
The aim is to monetise the business within the next 18 months. The ultimate form of monetisation may include an IPO or disposal of a minority stake in TowerCo, as well as potential disposals of minority or majority stakes at an individual country level.
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