Mexican telco Axtel has sold 883 towers to MATC Digital, the local subsidiary of American Tower, for US$250m.
The fixed-line operator will lease back space on the towers with contracts ranging between six and 15 years in length.
Axtel first revealed it…
Mexican telco Axtel has sold 883 towers to MATC Digital, the local subsidiary of American Tower, for US$250m.
The fixed-line operator will lease back space on the towers with contracts ranging between six and 15 years in length.
Axtel first revealed it was in negotiations at the end of last year, when it said that the lease-back arrangements would be for around US$20m, however it did not disclose the final figure it had reached with American Tower.
The tower sale is provisional on the closing of Axtel’s previously announced tender offer for two tranches of notes with a combined value of US$765m. In return bondholders will receive US$365m in new senior secured notes due 2020, US$114.8m in cash, and the equivalent of US$26.3m in peso-denominated convertible dollar-indexed notes; equivalent to just under 10% of the operator’s market capitalisation. So far 65% of bondholders have taken up the offer according to Axtel. The tender is scheduled to close at the end of January.
“We are very pleased with the tower sale transaction,” said Axtel’s CFO Felipe Canales. “Not only because it is a key element of the recapitalisation strategy we announced mid last year, but also because we are partnering with American Tower.”
Last Summer Axtel reportedly said it was looking to raise US$300m by selling towers or fibre infrastructure to avoid defaulting on its debt.
For American Tower the deal is a continuation of its acquisitive strategy that saw it shell out US$1.3bn on assets in Q4.
It spent US$525.7m on buying over 2,000 towers in Germany from KPN subsidiary E-Plus, US$506.6m on 680 towers in the US, and made two acquisitions of small portfolios in Mexico and Colombia.
At the beginning of January American Tower issued US$1bn in 10-year notes to refinance indebtedness incurred under its credit facilities in relation to those recent transactions.
In its Q3 results the towerco reported revenues of US$713m for the quarter and US$2.1bn for the year to date. Before the Q4 acquisitions American Tower had already bought over 3,500 tower sites for US$823m in 2012.
American Tower currently owns and operates over 53,000 towers across the United States, Brazil, Chile, Colombia, India, Germany, Ghana, Mexico, Peru, South Africa and Uganda.
In Axtel’s Q3 results it reported net debt of US$831m, down from US$873m in the previous quarter.
Axtel is one of a number of smaller fixed-line operators in Mexico, all dwarfed by Telmex which is reported to have around 80% market share.
