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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  CK Hutchison Holdings Limited    1   KYG217651051

CK HUTCHISON HOLDINGS LIMITED

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CK Hutchison : to sell almost 25,000 towers to Cellnex

11/16/2020 | 05:55am EST

Hong Kong'sCK Hutchison confirmed its intention to sell tower assets in six European markets to Spain'sCellnex Telecom, a rising force and the region's most acquisitive tower company.

Cellnex said it has agreed to buy about 24,500 towers and sites from CK Hutchison for a total of EUR10 billion (US$11.8 billion) - EUR8.6 billion in cash and EUR1.4 billion in the form of new Cellnex shares, representing a 5% stake in the towerco once the final transaction has been completed.

The tower company noted that the six deals include the rollout of up to 5,250 sites over the next eight years with an investment of around EUR1.4 billion ($1.65 billion).

Speed test: CK Hutchison is the parent company of mobile operator 3. (Source: CK Hutchison)

Speed test: CK Hutchison is the parent company of mobile operator 3.

(Source: CK Hutchison)

CK Hutchison said it is selling its tower assets in Austria (for EUR1.1 billion), Denmark (EUR0.4 billion), Ireland (EUR0.6 billion), Italy (EUR3.3 billion), Sweden (EUR0.8 billion) and the UK (EUR3.7 billion) where it operates mobile businesses under the Three brand.

The transactions in Austria, Denmark and Ireland are expected to complete by the end of 2020. The deal in Sweden is then expected to conclude by March 31, 2021, with Italy and the UK to follow by the end of 2021.

The Hong Kong group said it believes the tower sales will allow it to unlock the underlying value of the assets, 'while accelerating the rollout of 5G across the group's networks.' It noted that the total count of about 25,000 towers excludes sites owned and operated by 3GIS in Sweden.

CK Hutchison Group Telecom will enter into long-term service contracts with Cellnex in each market regarding the provision of passive telecommunications infrastructure services, as well as partnering with Cellnex to roll out additional sites across the six countries.

The contracts are for an initial period of 15 years, which can be extended by a further 15 years.

CK Hutchison also indicated it will use some of the proceeds from the transactions for a share buy-back program. Bloomberg noted that its shares have slumped 28% this year.

The rest of the gains will be used for expansion and to reduce debt. The cash raised will enable the company to cut net debt-to-net total capital ratio from 25.6% to 15.2%.

Cellnex passes 100,000 mark

Cellnex chairman Franco Bernabe said the towerco would boost its total portfolio to about 103,000 sites once the transactions and rollouts are complete.

'We will now be present in three new significant markets - Sweden, Austria and Denmark - and will further build upon our role as a key operator in three of our core markets, namely Italy, the UK and Ireland,' he said.

Want to know more about 5G? Check out our dedicated 5G content channel here on

Light Reading.

Some 8,900 of the total 24,600 sites to be acquired are located in Italy; interests in or deriving from 6,000 sites in the UK; 1,150 in Ireland; 2,650 in Sweden; 1,400 in Denmark; and 4,500 in Austria.

Around 1,100 new sites are to be built in Italy, 600 in the UK, 100 in Ireland, 2,550 in Sweden, 500 in Denmark and 400 in Austria.

Cellnex said the six transactions will add an estimated EBITDA of EUR970 million to the consolidated group while revenues will increase by EUR1.2 billion to EUR3.8 billion after the completion of the planned rollouts. Its future contracted sales (backlog) is expected to grow by about EUR33 billion up to EUR86 billion.

The move to add more assets in Europe continues an M&A-fueled expansion drive that has seen Cellnex become Europe's hottest mobile infrastructure neutral host.

(C) 2020 Electronic News Publishing, source ENP Newswire

Stocks mentioned in the article
ChangeLast1st jan.
CELLNEX TELECOM, S.A. 3.88% 50.32 Delayed Quote.2.44%
CK HUTCHISON HOLDINGS LIMITED -1.82% 56.5 End-of-day quote.4.44%
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Financials
Sales 2020 378 B 48 804 M 48 804 M
Net income 2020 30 383 M 3 920 M 3 920 M
Net Debt 2020 204 B 26 351 M 26 351 M
P/E ratio 2020 7,16x
Yield 2020 4,30%
Capitalization 218 B 28 104 M 28 108 M
EV / Sales 2020 1,12x
EV / Sales 2021 0,97x
Nbr of Employees 176 053
Free-Float 69,5%
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Mean consensus BUY
Number of Analysts 11
Average target price 72,77 HKD
Last Close Price 56,50 HKD
Spread / Highest target 46,9%
Spread / Average Target 28,8%
Spread / Lowest Target 16,8%
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Managers and Directors
NameTitle
Tzar Kuoi Li Chairman & Group Co-Managing Director
Kin Ning Fok Group Co-Managing Director & Executive Director
Frank John Sixt Executive Director & Group Finance Director
Hing Lam Kam Executive Director & Deputy Managing Director
Tak Chuen Ip Executive Director & Deputy Managing Director
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