Telenor establishes fibre company in Norway
October 7, 2022
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 per cent of the newly established company, Telenor Fiber, 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 (€3.4bn), 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”, said 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”, said 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”, added Lars Haram, Chief Investment Officer at Oslo Pensjonsforsikring.