Spark New Zealand sells 70% stake in towers business for $550 million

(Reuters) - Telecom firm Spark New Zealand Ltd said on Tuesday it will sell a 70% stake in its towers business for NZ$900 million ($550.2 million) to Canadian investment firm Ontario Teachers' Pension Plan Board.

The stake sale in Spark TowerCo, which includes about 1,263 sites and values the business at NZ$1.18 billion, comes months after the Auckland-based telecommunications firm announced the plan as it looks to expand its coverage with eyes on digital growth. (https://bit.ly/3O0tAl5)

Telecom firms of late have been seeking to offload their passive mobile assets – physical towers, which support functioning of active assets like mobile network – with the intention of reducing debt and upgrading their technology.

Last year, Australia's largest telecom firm Telstra Corp sold a 49% stake in its mobile tower business for A$2.8 billion, while Singapore Telecommunications divested a 70% stake in its Australian tower network for A$1.9 billion.

Earlier this year, TPG Telecom sold its passive mobile tower and rooftop infrastructure assets to Canada's OMERS Infrastructure for A$950 million, while Uniti Group agreed to a near A$3.62 billion takeover offer by a unit of Canada's Brookfield Asset Management.

Spark's stake sale will "enable direct shareholder returns and investment in future growth opportunities that will accelerate Spark's transition from traditional telecommunications to higher growth digital services," Spark Chair Justine Smyth said. (https://bit.ly/3NZqg9F)

Spark will retain the remaining stake in the business, and has entered a 15-year deal to ensure access to the existing and new towers. The deal also includes a commitment to build 670 towers over the next decade.

The deal is expected to be completed by first half of fiscal 2023 subject to approval from the country's foreign investment regulator, Overseas Investment Office, Spark added.

($1 = 1.6359 New Zealand dollars)

($1 = 1.4850 Australian dollars)

(Reporting by Sameer Manekar in Bengaluru; Editing by Shailesh Kuber)