PLDT Inc. said Tuesday it signed deals to sell its telecom towers and related infrastructure to two companies for P77 billion.
PLDT said subsidiaries Smart Communications Inc. and Digitel Mobile Philippines Inc. signed sale and purchase agreements with a subsidiary of edotco Group and a subsidiary of EdgePoint, which are supported by international groups with extensive experience in the telecom tower space.
It said that of the 5,907 towers being monetized, 2,973 towers across the country would be acquired by ISOC edotco Towers Inc. (subsidiary of edotco Group) and 2,934 towers in Luzon would be bought by Comworks Infratech Corp. (subsidiary of EdgePoint).
PLDT said concurrent with the execution of the agreements, Smart entered into master services agreements with the tower companies where Smart agreed to lease back the towers for 10 years.
It said that in addition to space, the TowerCos would also be responsible for providing operations and maintenance services and power to the sites. Smart secured competitive terms as the anchor tenant on the towers and expects to benefit from operational and capital expenditure savings.
The sale and leaseback will be complemented by a new tower build commitment of 1,500 towers over the next few years. The arrangement will further solidify Smart’s superior network quality and enhance the best customer experience in the Philippines.
“Our TowerCo partners, selected after a thorough process, will provide the group with the infusion of global best practices and innovative solutions,” said PLDT and Smart president and chief executive Alfredo Panlilio.
PLDT chairman Manuel Pangilinan said the agreement with experienced international tower companies represented another milestone in PLDT’s strategic transformation.
“We expect to reap benefits in terms of a valuation uplift and capital reallocation with PLDT applying the proceeds to deleverage, further invest in the network, and return cash to shareholders via a special dividend,” he said.
Adlan Tajudin, chief executive of edotco Group, said the transaction presents a highly strategic acquisition for the company as it diversifies and strengthens its pan-Asian platform with exposure to a nascent, high-growth market with strong governmental support.
Edotco Group manages over 54,000 towers across nine countries in Asia and is majority-owned by Axiata Group, a major telecom operator across Asia.
“EdgePoint is delighted and honored by PLDT’s faith in our capabilities. We look forward to working with PLDT in true partnership. We also look to bring to bear the vast experience of our local partners, Comworks Inc. and SMS Global Technologies Inc,” said Suresh Sidhu, chief executive of EdgePoint.
EdgePoint owns about 10,000 towers across Indonesia and Malaysia and is backed by DigitalBridge Group Inc., a leading global digital infrastructure investment firm with over $45 billion in assets under management.
The closing of the transaction will be staggered based on number of towers being transferred, with the first closing expected in May 2022 and the last closing by fourth quarter of 2022.
UBS AG acted as exclusive financial adviser to PLDT and Smart on the transaction.