Virgin Media O2 has sold a significant portion of its stake in Cornerstone to Equitix for £186m, reducing its holding to 25%.
- The deal includes a 16.66% stake in a holding company that owns half of Cornerstone.
- Equitix now partakes in what is described as the UK’s largest telecom tower portfolio.
- This sale is part of Virgin Media O2’s broader strategy to reduce debt and fund investments.
- The telecom company’s third-quarter revenue fell 2.4%, attributed to lower handset sales.
Virgin Media O2 recently confirmed the sale of an 8.33% stake in Cornerstone Towers to Equitix, an infrastructure investment firm, for £186 million. This transaction leaves Virgin Media O2 with just over a 25% ownership in Cornerstone, a leading mobile tower venture. This demonstrates a strategic effort by Virgin Media O2 to monetize its infrastructure assets while maintaining a significant stake in a critical national resource.
The agreement, which includes a 16.66% interest in a parent entity owning half of Cornerstone, positions Equitix as a key player in the UK’s telecom infrastructure. Equitix’s Chief Investment Officer, Achal Bhuwania, highlighted the significance of this acquisition by calling Cornerstone ‘the UK’s largest telecom tower portfolio’.
Virgin Media O2 has been actively engaging in similar transactions to manage debt and generate capital for essential investment ventures. Last year, the company sold a 16.67% share of Cornerstone to GLIL Infrastructure, securing £360 million. According to Lutz Schuler, CEO of Virgin Media O2, the recent deal follows a similar logic and strategy.
In conjunction with these financial maneuvers, Virgin Media O2 is significantly enhancing its 5G and fiber networks. The company allocated £1.5 billion toward network improvements this year. Consequently, in the third quarter, the fiber network extended to an additional 281,100 premises, marking a 44% increase compared to the previous year. Now, 5G services cover 68% of the UK population.
Despite these advances, Virgin Media O2 is experiencing a 2.4% drop in third-quarter revenue, now at £2.7 billion. The decline is primarily due to reduced handset sales. Additionally, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) saw a 4.1% year-over-year decrease, amounting to £1 billion. This decrease is attributed to heightened investments in key growth areas.
Lutz Schuler remains optimistic, noting that the company is on track with its EBITDA guidance for the year. He emphasized their continued focus on strategic investments moving into the final quarter of the year.
The strategic divestment aligns with Virgin Media O2’s goal to balance infrastructure monetization with growth investment despite revenue setbacks.
