Telus is weighing a partial sale of its wireless tower network as part of a broader plan to reduce its $29-billion debt.
According to sources familiar with the process, the Vancouver-based company has hired TD Securities to market a 49.9 per cent stake in its 3,000-tower portfolio to institutional investors and tower operators, reports the Globe and Mail.
The internal project, code-named “Project Air,” launched in February. TD Securities sent out a pitch book outlining the towers’ financials—reportedly generating $160 million in revenue and $110 million in cash flow last year. The towers are roughly two-thirds ground-based and one-third rooftop installations, with half located in major cities.
Analysts estimate the full portfolio could be worth between $1 billion and $3 billion, depending on market conditions and comparable deals. That means a minority stake could fetch Telus between $500 million and $1.5 billion, though sources say the company is only likely to move forward if it secures a price near the higher end of that range.
Telus CEO Darren Entwistle confirmed the company is exploring monetization of its tower assets, saying any deal would go directly toward paying down debt and improving operational efficiency.
“We have engaged with advisors to explore the monetization of our tower infrastructure. If we are able to do this within the parameters of our desired economics, it would enhance the efficiency and effectiveness of our network operations,” said Entwistle in a statement on Wednesday. “This initiative reflects Telus’ broader commitment to long-term sustainable growth, as the company looks to strengthen its balance sheet as 100% of the proceeds would be used to pay down debt.”
CFO Doug French added the proceeds would help Telus meet its target to reduce its net debt-to-EBITDA ratio to three times by 2027, while also winding down its discounted dividend reinvestment program.
In addition to the tower sale, Telus previously said it is aiming to raise $500 million by selling off surplus copper from its old network infrastructure and has said it could bring in up to $3 billion by offloading real estate it no longer needs.
Unlike Telus, competitors Bell and Rogers are not currently planning to sell their tower assets, but sources say both are keeping an eye on how the Telus deal plays out.
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When companies start to monetize assets they always cite long term sustainability but it's almost always due to short to medium term problems (and executive's desire to look good right now).
How a member of oligopoly whose members literally have a license to print money, as they can freely charge as much as they want for their services, can get into $29 billion debt?