TPG Telecom offloads passive tower assets for $950M

Will now fall into the hands of OMERS.

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TPG Telecom is to sell its passive mobile tower and rooftop infrastructure assets to OMERS Infrastructure Management for $950 million.

OMERS, which stands for Ontario Pension Fund for Municipal Employees, has entered a binding agreement to take 100 per cent of TPG's tower assets, which includes 1,237 existing sites and a development program of 252 new sites.

TPG Telecom said the transaction will deliver net cash proceeds of approximately $890 million which it will use to repay existing bank debt.

"We are delighted to have concluded the strategic review of these assets with such a strong outcome for TPG Telecom shareholders," said TPG Telecom CEO and managing director Iñaki Berroeta.

"The transaction represents competitive long-term financing, which will reduce our total financial leverage and deliver lower borrowing costs. The tower sale demonstrates the disciplined approach we are taking to asset utilisation and capital allocation as we pursue opportunities to unlock value and maximise our potential for customers and shareholders."

Berroeta added that the sales builds on the "landmark" multi-operator core network (MOCN) agreement TPG announced in February to enable regional network sharing with Telstra, although this is still subject to approval.

“We are excited to welcome OMERS as a strategic partner and long-term custodian of these mobile network sites," he added. "We look forward to working with OMERS to transition the business and then to support its growth as it provides critical telecommunications infrastructure services to our customers and the broader Australian telecommunications sector.’’

The 1,237 Tower Assets sites include 428 towers and 809 rooftops, which represents approximately 21 per cent of TPG Telecom’s total mobile network footprint, the remainder of which is already owned and operated by other tower companies.

The portfolio includes 120 sites in non-metropolitan locations at which TPG Telecom intends to decommission its active equipment conditional on regulatory approval of the MOCN agreement. TPG Telecom will retain ownership of all radio access network infrastructure.