Dutch telco KPN and pension fund ABP have signed an agreement to form a tower company.
In an announcement, KPN said that the partnership is part of its ‘Connect, Activate & Grow’ strategy aimed at optimizing the value of its passive infrastructure assets.
The tower company will hold KPN's passive mobile infrastructure assets plus that of NOVEC and OTC (portfolio companies owned by TenneT and ABP respectively).
The company's tower portfolio will consist of around 3,800 towers and rooftops in the Netherlands and also receive a built-to-suit commitment for the next 10 years from KPN.
"TowerCo and KPN have entered into a long-term master service agreement, stipulating the terms under which KPN will continue to be a tenant of TowerCo for an initial period of 20 years," noted KPN. "TowerCo aims to further increase tenancy levels of its network by providing access to attractive and fully modernized towers and rooftops."
KPN will hold a 51 percent consolidating stake in the JV, while ABP holds the remaining 49 percent.
As part of the transaction, TenneT will sell its stake in NOVEC.
KPN has agreed to an upfront cash payment of around €120 million ($130m) to NOVEC/OTC’s current shareholders for the stake in the company and the amended lease terms, subject to closing adjustments.
According to KPN, the consolidated impact of the transaction on its 2024 Adjusted EBITDA AL would be ~€30m ($32m); on a similar basis, the impact on KPN’s Operating Free Cash Flow would be ~€20m ($21.75m).
The transaction remains subject to regulatory and works council approval.
