PLDT Sells Towers for $1.47 Billion in Largest Foreign Purchase

(Bloomberg) -- PLDT Inc. raised 77 billion pesos ($1.47 billion) selling half of its telecommunication towers, the largest ever acquisition of assets in the Philippines by international investors, it said.

Part of the proceeds will settle 27.5 billion pesos of debt and pay 9 billion pesos of special dividends, CFO Anabelle Chua said in a briefing. It will also fund cash requirements that would save PLDT from taking on 24.5 billion pesos of additional debt, she said.

PLDT units Smart Communications Inc. and Digitel Mobile Philippines Inc. sold 5,907 telecom towers at about 13 million pesos each, the highest for similar transactions in the region. Axiata Group’s edotco Group and EdgePoint, backed by DigitalBridge Group, paid more than three times the 23 billion peso book value of the towers, Chua said.

With the proceeds, PLDT is also plans to raise this year’s capital spending plan of up to 80 billion pesos, Chairman Manuel Pangilinan said.

Other Highlights

• Smart to lease back the towers for about 7 billion pesos a year over a 10-year period, Chua said, adding this will save the group in operational costs and capital expenditures
• As part of the sales agreement, edotco Group and EdgePoint will build 1,500 towers, two-thirds of which will be up by 2025
• The tower sale will be earnings accretive for PLDT over the next 10 years at about 10% annually from last year’s 30 billion-peso core profit
• PLDT will save 2.6 billion pesos in financing costs
• PLDT will retain ownership of active infrastructure which include the antennas, remote radios, microwave dish and fiber backhaul; the tower companies will own the steel structures, cooling systems, power supply, land lease contracts
• On April 5: PLDT Said to Pick Edgepoint, Edotco for $1.5 Billion Tower Deals

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