OSLO, NORWAY: Telenor has entered into an agreement to divest 30% of the newly established company Telenor Fiber AS in Norway to a consortium led by KKR and Oslo Pensjonsforsikring. The transaction is expected to be completed early 2023.          

The agreed sales price represents an enterprise value for the Norwegian fibre business of NOK 36.1 billion, generating proceeds of approximately NOK 10.8 billion to Telenor. The transaction value represents 21x the proforma EBITDA of NOK 1.7 billion for 2021.

The newly established company is a subsidiary of Telenor and will own the passive fibre assets in Norway. This includes 130,000 km of cables, connecting upwards of 560k homes. The company’s assets will be transferred from Telenor Norge in a demerger process prior to completion of the transaction.

Telenor maintains control of both the operations and processes in the company. Telenor has conducted an extensive consultation process with the relevant government authorities, who have given their overall feedback that the transaction safeguards critical security and regulatory considerations.

“We are executing on the strategy presented at the Capital Markets Day in September. This transaction highlights the value in our infrastructure, strengthen our financial position and unlocks capital to support continued high fibre roll-out in Norway.

We are bringing in strong investors with a long-term horizon. Following the transaction, Telenor will propose that parts of the proceeds are used for share buy backs. We believe this transaction benefits our stakeholders while safeguarding future investments in Norway’s fibre”, says EVP and Group CFO Tone Hegland Bachke.

Telenor intends to use parts of the proceeds for share buybacks to mitigate the effects of the new minority interests. Telenor’s Board of Directors will hence ask the General Meeting for a share buyback mandate. This is estimated to constitute an amount of around 30 percent of the proceeds.

The agreement also includes a right for Telenor to acquire the minority stake in the event of a potential future sale. Considering national and societal interest, Telenor and the government have also entered into an agreement that provides the government with the opportunity to exercise the right to acquire the minority stake if Telenor chooses not to.