(Alliance News) - TalkTalk Telecom Group PLC on Tuesday announced the sale of its fibre network roll-out business to a UK digital infrastructure firm.
TalkTalk is selling FibreNation Ltd, as well as its two-thirds stake in Bolt Pro Tem Ltd, for a combined GBP200 million in cash to CityFibre Infrastructure Holdings Ltd.
TalkTalk, a member of the FTSE 250, launched FibreNation as part of a plan to roll-out fibre-to-the-premises to over three million UK homes and business. Over the past 18 months, a number of towns in Yorkshire, such as Harrogate and Ripon, have had fibre networks laid.
London-headquartered TalkTalk said the sale is part of a plan to simplify the business. It has been "clear" the roll-out of fibre would not be fully funded from its own balance sheet, and has decided a sale is the best way forward.
The FibreNation business suffered an underlying pretax loss in the year to March 2019 of GBP6 million, TalkTalk noted.
TalkTalk said 58% of shareholders have approved the two sales, and it plans to use the proceeds to strengthen the balance sheet. Completion is expected in March.
Chief Executive Tristia Harrison said: "We are pleased to announce today's agreement with CityFibre, which is good news for TalkTalk, and good news for Britain and its full fibre roll-out ambition.
"Our investment over the last five years and the excellent work delivered by the FibreNation team, combined with CityFibre's well-established platform, will support wide-geographic reach of full fibre and further drive competition in the market."
"The sale of FibreNation to CityFibre, in combination with a competitive wholesale agreement, enables us to continue our strategy to accelerate TalkTalk's fibre growth for our residential and business customers, thereby delivering a superior customer experience at an affordable price," she added.
TalkTalk shares were 0.8% lower on Tuesday in early trade in London at 113.45 pence each.
By George Collard; georgecollard@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
