KKR says it co-operated with the European Commission in good faith and provided specific and accurate information. Fibercop issues bonds worth 2.8 billion euros
The European Commission opened a formal investigation to check whether it received from NYSE-listed KKR incorrect or misleading information during the merger investigation into the acquisition of NetCo, part of Milan-listed TIM (statement).
In June 2024, FiberCop, a joint venture of TIM and KKR that includes the secondary landline of TIM, acquired NetCo, the owner of landline infrastructure network of the former Italian TMT monopolist. Optics BidCo, a vehicle of KKR, Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPP Investments) (see here a previous post by BeBeez) later merged with Fibercop (communication to bondholders). The current shareholders of Optics are KKR Infrastructure (37.8%), ADIA (17.5%), CPP (17.5%), F2i (11.2%), and The Italian Ministry of Economy and Finance (16%).
The EU Antitrust unconditionally authorised the operation in May 2024. The authority said that the merged entity would have had no impact on the market for wholesale broadband access services in Italy and would not have been able to deteriorate the conditions for access to passive services, nor would it have been able to terminate such access, thanks to the long-term agreements that FiberCop signed with several operators such as Fastweb and Iliad. The EU Antitrust therefore announced the opening of an investigation to assess whether KKR had provided incorrect or misleading information on these agreements.
KKR said: “As custodians of public infrastructure, we take our responsibility to those we serve, the European Commission and Italian regulators seriously. As part of the authorisation of the transaction, we have cooperated with the European Commission in good faith and provided specific and accurate information, and FiberCop continues to comply with its commitments to customers and the economic regulation regulated by AGCOM, Italy’s independent communications regulator. KKR will fully cooperate with the Commission to address any concerns and work towards a full resolution of the matter.”
Fibercop recently placed Luxembourg-listed senior secured bond for a total of 2.8 billion euros (press release and Bond Prospect).
One bond is of 1.2 billion with maturity in 2030 and 4.75% coupon, another issuance amounts to 900 million with maturity in 2032 and 5.125% coupon, the third tranche is worth 700 million with maturity in 2031 and a coupon of 3M euribor (0% floor) plus 300 basis points. The company initially aimed to raise 1.4 billion but then doubled the size considering the strong investors demand. Such issuance also provided the group with a lower weighted average coupon than FiberCop’s previous weighted average cash debt cost (press release). The firm will invest such proceeds in its core business and the potential refinancing of existing debt, as well as to pay any fees and expenses related to the offering.
In 2024, Fibercop generated a pro-forma turnover of 3.875 billion, a net of leasing items ebitda of 1.855 billion (2.223 billion before leasing), a net of leasing net financial debt of 9.2 billion (11.2 billion including leasing liabilities), and a 5X leverage (Investors presentation).
In February 2025, The Financial Times said that on 16 January, Thursday, FiberCop’s cfo Gabriele Mandurino said to investors that in 2024 the company’s ebitda in 2025 will be 449 million lower than originally forecasts in KKR’s business plan, so that the projection of total cumulative ebitda for the 5-year period would now stand at 2 billion, potentially jeopardising the projected dividends to shareholders. This shortfall forced FiberCop to choose between a major cut in planned dividends and issuing new bonds (see here a previous post by BeBeez).
FiberCop replied to such claims saying: “We will share our forecast figures for the 2024 financial year and those for the 2025 budget at the BoD scheduled for 25 February [Tuesday]. They will be in line with the multi-year plan that all shareholders drawn up and approved at the time of the closing of the TIM network spin-off transaction”.
