Telenor establishes fibre company in Norway
October 07 2022 - 2:55AM
Telenor establishes fibre company in Norway
(Fornebu 7 September 2022) Telenor enters into a
transaction supporting future investments in Norway's telecom
infrastructure.
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, Telenor
Fiber AS, in Norway to a consortium led by KKR, investing through
its Core Infrastructure strategy. The consortium includes Oslo
Pensjonsforsikring as a co-investor.
The newly established company is a subsidiary of Telenor and
will be a part of the Infrastructure business area. The company
will own the passive fibre assets in Norway. This includes 130,000
km of cables, connecting upwards of 560,000 homes. 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.
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.
“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.
Facts about the transaction:
- Telenor maintains control in the company with 70 percent of the
shares.
- The transaction is expected to be completed early 2023.
- The transaction will not affect customers. Telenor Norway will
still handle all customers, including wholesale, as per usual.
- The transaction will entail no change to Telenor’s regulatory
obligations, including security and Norway’s
- Electronic Communications Act.
- The fibre company will be a Telenor subsidiary.
Telenor 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 percent 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.
KKR is a leading global investment firm that offers alternative
asset management as well as capital markets and insurance
solutions. KKR established its Global Infrastructure business in
2008 and has since grown to one of the largest infrastructure
investors globally with a team of more than 75 dedicated investment
professionals. The firm currently oversees approximately US$49
billion in infrastructure assets globally as of 30 June, 2022, and
has made over 65 infrastructure investments across a range of
sub-sectors and geographies. KKR’s infrastructure platform is
devised specifically for long term, capital intensive structural
investments.
Oslo Pensjonsforsikring AS (OPF) is a life insurance company
wholly owned by the Municipality of Oslo. OPF delivers public
service pensions to most employees in Oslo municipality, municipal
enterprises, several of the municipality's joint-stock companies
and employees in hospitals that were previously owned by Oslo
municipality. OPF is one of the largest non-governmental investment
managers in Norway, managing assets of approximately NOK 125
billion (c. €12.5 billion), with strong experience in direct and
partnership investments in real estate and infrastructure.
Investor Relations:
Øystein Myrvold, (+47) 992 30 460
Håkon Hatlevik, (+47) 901 46 070
Media contact:
Heljar Havnes, (+47) 908 12 081