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(Adds comments from Vantage Towers CEO and CFO)
By Paul Sandle and Douglas Busvine
FRANKFURT/LONDON, Nov 17 (Reuters) - Vodafone's
European towers spin-out Vantage Towers said it had 1 billion
euros available for acquisitions and could increase its
firepower after its planned listing in Germany early next year.
Vantage Towers presented its strategy and financial targets
to investors on Tuesday. It said it expected to report pro forma
adjusted core earnings of up to 540 million euros ($640 million)
in the financial year to end-March 2021.
Vodafone has spun-out its mobile network towers to take
advantage of investor appetite for infrastructure assets, which
offer a long-term secured income stream. It will use the
proceeds to reduce its debt.
Spain's Cellnex has led the mobile infrastructure
charge in Europe, and on Thursday unveiled its biggest purchase:
buying 24,600 telecom towers across Europe from Hong Kong's CK
Hutchison for 10 billion euros ($11.81 billion).
French operator Orange told the Financial Times on
Monday it was "open minded" about the future of its towers,
which it is also putting into a separate company.
Vantage Towers CEO Vivek Badrinath said a requirement for
data as well as the roll-out of 5G technology and new and wider
network coverage obligations across Europe was driving growth.
"These factors will increase the number of tenants renting
space on our towers and we have also received firm commitments
to build 7,100 new sites for our customers," he said.
Vantage operates around 68,000 macro sites across nine
European countries, led by Germany and Spain. It provides the
physical towers and power supply, while the mobile operator
installs its own radio transmission equipment.
Badrinath said only 42% of masts in Europe were owned by
dedicated companies against 90% in the United States, and each
tower had on average 1.5 mobile operator tenants versus about 2.
"Our attractively located network helps us to commercialise
and grow the tenancy ratio to over 1.5 times in the medium
term," he told reporters. Vantage's current tenancy ratio is
1.38.
He said 1 billion euros of leverage was available for
strategic investments, for example in fibre back haul
connections, and it could also buy more sites in its existing
countries or acquire portfolios in new geographies.
"If opportunities arise that create value beyond the very
strong asset base that we have...we would look at things that
are attractive and consistent with what we represent," he said,
adding that it would have access to equity over and above the 1
billion euros set aside.
The new company will include a proportionate share of INWIT,
Italy's largest tower operator, in which Vodafone and Telecom
Italia both hold stakes.
Vodafone also said it intended to transfer its 50% stake in
CTIL, its infrastructure joint venture with Telefonica
in Britain, into Vantage.
Vodafone Chief Executive Nick Read said on Monday talks with
Telefonica were advanced.
Consolidated earnings before interest, tax, depreciation and
amortisation, adjusted for special factors (EBITDAal), for
Vantage Towers were expected to come in at 530-540 million euros
in 2021. In 2020, adjusted EBITDal was 523 million euros.
($1 = 0.8438 euros)
(Reporting by Christoph Steitz and Paul Sandle; editing by
Thomas Seythal, Kirsten Donovan)
