Italian mobile phone operator Wind, a unit of Russian telecoms group Vimpelcom, has set a mid-December deadline to receive binding offers for its phone masts. In a press release about Q3 2014 figures, VImpelcom said last November 12th that “Wind is progressing with its tower sale process and expects this to be completed in the first quarter of 2015”.
Financial advisors Banca Imi and Hsbc selected some bids for Wind’s towers in the last few days among the non-binding offers put forward by several potential investors. Passing to the next step of the auction are said to be Italian infrastructure fund F2i together with US private equity fund Providence; and some industrial groups, such as Italian Ei Towers (controlled by Mediaset group with a 40% stake), French TDF, Spanish Abertis. Moreover Italian RayWay‘s ceo, Camillo Rossotto, said yesterday to the Italian press: “We are going on with the contest on WInd’s towers. We are actively part in the process”
The dossier had been evalued also by several other potential investors both among industrial groups such as Crown Castle (Usa) and RaiWay (Italy) and among private equity and infrastructure funds such as Macquarie, Babcock, Antin, Permian, Cvc and Apax.
Wind’s sale and leaseback mobile phone masts is a long-expected deal that could be worth 500-600 million euros in enterprise value. Vimpelcom’s management talked about the sale for the first time last March in a meeting with Wind’s lenders when a multi-step refinancing plan to improve Wind’s capital structure was presented. The plan included a 500 million euros cash injection and an 800 million euros refinancement of part of WInd’s existing debt.
Moreover it was said that sales of some specific towers might accelerate WInd’s debt reduction process (download here Wind’s presentation, see page 22).
Wind is selling about 50% of its 13,000 towers and will lease them back. In its presentation to lenders Wind actually wrote that tower operator market pays on average a higher ebitda multiple than telecoms: “tower multiples are still in the range of 10x-5x vs. 6x for telecoms”. So, “the possible transaction perimeters considered include a subset of Wind’s sites (5,000 – 7,000 sites) mainly situated in rural areas (of which about 20% with at least another mobile network operator hosted)” and that “based on a preliminary valuation, considering 5,000 – 7,000 rural sites as initiative perimeter, the enterprise value of this potential initiative is estimated in the range of €350-550 million. Wind proceeds, based on its retaining a 10%-15% stake, are in the range of €300-500 million. A potentially larger perimeter can be evaluated although it increases deal size and complexity”.
Actually in the last few days word is that Wind might sell a quite higher nuber of towers in order to reach a 700 million-1 billion euros in enterprise value, which would mean a sale of almost all Wind’s towers.
