Spark New Zealand sells 70% stake in towers business for $550 mln (updated)

Spark New Zealand

11/07/2022 22:19

(Updates with detail, background, Chair's comment)
    July 12 (Reuters) - Telecom firm Spark New Zealand Ltd
 SPK.NZ  said on Tuesday it will sell a 70% stake in its towers
business for NZ$900 million  ($550.2 million) to Canadian
investment firm Ontario Teachers' Pension Plan Board.
    The stake sale in Spark TowerCo, which includes about 1,263
sites and values the business at NZ$1.18 billion, comes months
after the Auckland-based telecommunications firm announced the
plan as it looks to expand its coverage with eyes on digital
growth. (https://bit.ly/3O0tAl5)
    Telecom firms of late have been seeking to offload their
passive mobile assets – physical towers, which support
functioning of active assets like mobile network – with the
intention of reducing debt and upgrading their technology. 
    Last year, Australia's largest telecom firm Telstra Corp
 TLS.AX  sold a 49% stake in its mobile tower business for A$2.8
billion, while Singapore Telecommunications  STEL.SI  divested a
70% stake in its Australian tower network for A$1.9 billion.
 urn:newsml:reuters.com:*:nL3N2OB49Q  urn:newsml:reuters.com:*:nL4N2QX06E
    Earlier this year, TPG Telecom  TPG.AX  sold its passive
mobile tower and rooftop infrastructure assets to Canada's OMERS
Infrastructure for A$950 million, while Uniti Group  UWL.AX 
agreed to a near A$3.62 billion takeover offer by a unit of
Canada's Brookfield Asset Management.  urn:newsml:reuters.com:*:nL2N2X00HW  urn:newsml:reuters.com:*:nL3N2WB3QN
    Spark's stake sale will "enable direct shareholder returns
and investment in future growth opportunities that will
accelerate Spark's transition from traditional
telecommunications to higher growth digital services," Spark
Chair Justine Smyth said. (https://bit.ly/3NZqg9F)
    Spark will retain the remaining stake in the business, and
has entered a 15-year deal to ensure access to the existing and
new towers. The deal also includes a commitment to build 670
towers over the next decade. 
    The deal is expected to be completed by first half of fiscal
2023 subject to approval from the country's foreign investment
regulator, Overseas Investment Office, Spark added. 
    
($1 = 1.6359 New Zealand dollars)  
($1 = 1.4850 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru; Editing by Shailesh
Kuber)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))