Swiss mobile operator Sunrise Communications has said it plans to list on the SIX Swiss Exchange in the first half of the year and expects to raise SFr1.35bn (US$1.32bn) from its primary offering.
The telco’s private equity owner, CVC Capital…
Swiss mobile operator Sunrise Communications has said it plans to list on the SIX Swiss Exchange in the first half of the year and expects to raise SFr1.35bn (US$1.32bn) from its primary offering.
The telco’s private equity owner, CVC Capital Partners, had been weighing up its exit options for some time and finally plumped for an IPO just weeks after Sunrise’s rival, Orange Switzerland, was sold to French investor Xavier Niel.
A listing could come in mid-February and value Sunrise at close to SFr5bn (US$4.9bn), reports have suggested.
Deutsche Bank and UBS are running the IPO. In addition, Morgan Stanley and Berenberg are acting as additional joint bookrunners, and Bank Vontobel is co-lead manager. Lilja & Co is acting as the independent adviser to CVC and Sunrise.
CVC has committed to make a further 15% of shares available in a greenshoe option, should there be the demand.
The proceeds from the float will be used to deleverage Sunrise’s balance sheet and reduce the cost of its debt, allowing it to exploit future growth opportunities, the company said.
It added that after the IPO, it will implement a sustainable dividend policy and has pledged an absolute dividend of SFr135m, which will be paid in 2016. Sunrise has also committed to a dividend payout ratio of at least 65% of equity free cash flow from 2016. Once the operator reaches its target capital structure of 2.5x net debt to EBITDA, it plans to return excess cash to shareholders.
Sunrise is the second-largest telecoms operator in Switzerland after Swisscom. For the 12 months ending 30 September 2014, it declared revenues of SFr2bn and EBITDA of SFR621m.
CVC was looking at a listing towards the end of last year but the plan was reportedly put on ice after Niel struck a deal to buy Orange Switzerland through his NJJ Capital vehicle.
Sunrise has been continually linked to a merger with Orange, which would take the country’s mobile market down from three operators to two.
Speaking to TelecomFinance in November, Swisscom’s CFO Mario Rossi said there was a good business case for an Orange-Sunrise merger and the sector regulator would be in favour, but that the competition regulator was less predictable.
A previous attempt to combine the operators was rejected by the local antitrust authority in 2010. Following that decision, CVC bought Sunrise from Danish telco TDC later in 2010 for US$3.2bn.
