Virgin Media O2 sells Cornerstone Towers stake as revenue dips
Virgin Media O2 has announced the sale of a stake in its mobile towers joint venture, Cornerstone, to infrastructure investor Equitix, bagging £186m in cash.
The deal, which leaves the telco with just over 25 per cent of Cornerstone after selling 8.33 per cent, involves a 16.66 per cent stake in a holding company that owns half of Cornerstone.
Achal Bhuwania, chief investment officer of Equitix, called Cornerstone “the UK’s largest telecom tower portfolio” and “critical national infrastructure which is central to our mandate to invest in core infrastructure.”
It comes amid an industry-wide trend in telecoms as companies seek to deleverage and unlock funds for major investment drives.
Virgin Media O2 struck a similar deal last year when it offloaded 16.67 per cent of its Cornerstone stake to GLIL Infrastructure, a British pension fund-backed firm, for £360m.
Virgin Media O2’s chief executive Lutz Schüler said the extra divestment “follows the same logic and strategic rationale as our previous deal, allowing us to successfully monetise our infrastructure while retaining a controlling share in an important asset”.
The company’s 5G and fibre rollout has continued “at pace”, he added, with £1.5bn poured into network development so far this year.
Fibre rollout reached 281,100 additional premises in Q3 – a 44 per cent jump compared to last year – while 5G coverage now reaches 68 per cent of the UK population.
But the telecom firm, co-owned by Liberty Global and Spain’s Telefónica, also revealed today it has booked a 2.4 per cent dip in third quarter revenue, now at £2.7bn, due to a fall in handset sales.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) took a hit too, down 4.1 per cent year-on-year to £1bn, a decline the firm blamed on rising investments in key growth areas.
“In the first nine months we are tracking well against EBITDA guidance, enabling us to reiterate all guidance metrics with confidence, as we keep our foot on the gas with targeted investments in the salient final quarter,” Schüler added.