December 7, 2022

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Telenor sells 30 percent of wholly owned fiber company for NOK 10.8 billion

Telenor sells 30 percent of wholly owned fiber company for NOK 10.8 billion

– For several years, we have invested significant money in fiber and will continue to do so. This deal makes this possible in a good way, says CFO Tone Hegland Bachke at Telenor.

Telenor has entered into an agreement to sell a 30 percent stake in the newly established fiber-optic company and its subsidiary to the telecommunications giant. The buyers are a consortium consisting of KKR and Oslo Pensjonsforsikring, according to the exchange’s announcement.

The deal is worth 10.8 billion NOK and is expected to be completed in early 2023.

The value of the fiber company deals at 36.1 billion. The newly formed company, which is also a subsidiary of Telenor, will own the passive elements of the fiber network. That corresponds to about 130,000 kilometers of cable serving nearly 560,000 households, according to Telenor.

The new company name is Telenor Fiber as.

“Put more fiber”

Telenor’s chief financial officer confirms that the company is now following through on the strategy presented by management on capital market day a few weeks ago.

Then we said we see infrastructure as a separate piece of value creation, says Hegland Bachke

She is very satisfied with Telenor’s new fiber rates reached by Telenor and the new partners.

– What will you use the 10.8 billion Norwegian kroner you get now?

– This will help us put more fiber into Norway. At the same time, we suggest using 30 percent of the amount to buy back the skater, but this must be approved by the general meeting, says the CFO.

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Jannicke Hilland started October 1 as Executive Vice President in charge of Telenor Infrastructure.  She came from the position of CEO of the energy company Eviny.  Hyland became president of the new fiber company Telenor.

Jannicke Hilland started October 1 as Executive Vice President in charge of Telenor Infrastructure. She came from the position of CEO of the energy company Eviny. Hyland became president of the new fiber company Telenor. (Photo: Gabriel Aas Skålevik)

Telenor’s new CEO, Infrastructure, Jannicke Hilland, will be responsible for Telenor’s fiber, mobile, data and mobile tower operations.

Hyland will become chairman of the new company’s board of directors. We’re setting up a management team for the new company, says Hegland Paschke.

Telenor Nordic President, CEO Petter-Børre Furberg stresses that Telenor’s broadband customers won’t notice anything when Telenor sells its fiber business.

Our individual and wholesale customers will not notice any difference other than that we will continue to invest in fiber.

– But isn’t Telenor now selling parts of its core business in Norway?

We are clear that the primary business is mobile, fiber and cable. We will continue to do so. Telenor has never invested as much in infrastructure in Norway as we have in recent years, and this sale helps enable the best 5G network to be built in Norway, Voorberg says.

Today, 560,000 households in Norway are connected to the Telenor fiber network.

Today, 80 per cent of Norwegian families have fibre. The authorities’ goal is for everyone to have access to high-speed broadband, and we want to be an important part of making that happen, says Chief Financial Officer Hegland Bachke.

It’s not hiding the fact that Telenor’s other infrastructure companies may get new co-owners. In the Nordic countries alone, Telenor owns 26,000 mobile transmitters, of which the company owns 100% of 21,000 of them. Many of them are placed in so-called mobile towers.

There is some time to come, says Hegland Paschke on the sale of Telenor mobile towers.

Want to maintain control

Telenor will dismantle the assets before closing the deal, as the telecom giant will retain control of the company and its operations.

We bring in strong co-investors with a long time horizon. Telenor will suggest using this portion of the consideration to buy back shares. We believe this transaction is beneficial to all parties and secures future fiber investments in Norway, Telenor’s CFO Tone Hegland Bachke says in a press release.

Telenor was given first refusal in the event of a future sale of its 30 per cent stake.

Based on considerations of national control as well as how other social considerations can best be taken care of, the state and Telenor have entered into an agreement that the state can take on pre-emption if Telenor does not wish to use it, the company writes.

– very positive

Analyst Christopher Hajevik at Pareto Securities notes that the sell-off could be positive for Telenor’s valuation.

– It can be very positive. Furthermore, their Northern Towers Company in particular was highlighted. Hajvik says the deal is positive in terms of what they can get for Al Abraaj later.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.