Norwegian telco group Telenor has spun off its passive fibre infrastructure in Norway to its newly-created subsidiary Telenor Fiber AS and has sold a 30% stake in the new company to a group of investors. The consortium, led by global investment firm KKR, investing through its Core Infrastructure strategy, also includes lifem insurance company Oslo Pensjonsforsikring. The assets include 130,000 km of cables, connecting upwards of 560,000 homes. Telenor Norge will be the company’s only customer, with all operational processes remain under full Telenor control.
Telenor says the agreed sales price represents an enterprise value for the Norwegian fibre business of NOK 36.1 billion, resulting in proceeds of approximately NOK 10.8 billion to Telenor. The business generated a proforma EBITDA of NOK 1.7 billion in 2021.
“We are executing on the strategy presented at the Capital Markets Day in September. This transaction highlights the value in our infrastructure and unlocks capital to support continued high fibre roll-out in Norway, and we are bringing in strong investors with a long-term horizon. Following the transaction, Telenor will propose that parts of the proceeds are used for share buy backs. We believe this transaction benefits our stakeholders while safeguarding future investments in Norway’s fibre”, says Tone Hegland Bachke, EVP and CFO in Telenor Group (pictured).
“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, European infrastructure at KKR.
“We are proud to be part of the investment and look forward to further strengthening Norwegian fibre infrastructure together with Telenor and KKR”, says Lars Haram, chief investment officer at Oslo Pensjonsforsikring.
Telenor says it intends to use parts of the proceeds for share buybacks to mitigate the effects of the new minority interests. Telenor’s Board of Directors will hence ask the General Meeting for a share buyback mandate amounting to around 30% of the proceeds. The agreement also includes a right for Telenor to acquire the minority stake in the event of a potential future sale. Considering national and societal interest, Telenor and the government have also entered into an agreement that provides the government with the opportunity to exercise the right to acquire the minority stake if Telenor chooses not to.
For more information, visit www.telenor.com