Cellnex will increase capital by 2,500 million euros to purchase the telco division of Arqiva

The increase, with preferential subscription rights for current shareholders, will be for 2,500 million euros, which is equivalent to 29% of the capital before the increase and 22.5% after it.

Cellnex Telecom has notified the National Securities Market Commission (CNMV) of the agreement adopted by the Board of Directors to carry out a capital increasel with preferential subscription rights, for an amount of 2.5 billion euros. The decision has been adopted based on the delegation granted by the General Shareholders' Meeting held on May 9, 2019.

The funds from the expansion will reinforce the resources destined to finance the acquisition of Arqiva's Telecommunications division, as well as other projects in Cellnex's active portfolio.

The president of Cellnex, Franco Bernabè, has highlighted the Board's support "for a strategy of sustained growth that, in just over four years since going public, has led the company to extend its operations to 7 countries in Europe, more than doubling its main magnitudes and occupying a position of clear European leadership among telecommunications infrastructure operators. Since going public, Cellnex has announced investments and investment commitments worth approximately 10.8 billion euros, including the agreement announced today for the acquisition of the Telecommunications division of Arqiva in the United Kingdom, and has a portfolio of projects that allows us to think that this growth process will continue, maintaining and reinforcing the attractiveness and interest of investors and shareholders in a project that since May 2015 has reported a total return for the shareholder of more than 193%."

For your part Tobias Martinez, CEO of Cellnex, highlights that “reinforcing the company's own resources will allow it to have greater strength to finance this growth while analyzing new opportunities.”

"Beyond the agreement to acquire the Telecommunications division of Arqiva, we continue to actively analyze growth opportunities in practically all the markets in which we already operate. The objective is to consolidate and expand our position in the seven countries, after the recent entry into Ireland this September, in which we are present while continuing to be attentive to projects that may arise in other European markets," adds Martínez.

“In this sense, the growth vector relative to the infrastructure ecosystem associated with the deployment of 5G. With 5G, new avenues of development are opened linked to the deployments of fiber optics to the tower and to the “small cells” (“backhauling”); the deployment and densification of networks based on small cells and distributed antenna systems (DAS); and also the potential of hosting data processing centers in strategic locations that allow said processing capacity to be brought closer to the emission points and users, realizing the real-time communication objectives demanded by critical applications based on 5G”, he concludes.

Capital increase

The expansion will be carried out through the issuance and putting into circulation of approximately 86.7 million common shares at a subscription price (capital plus share premium) of 28.85 euros for each New Share. The effective amount of the Capital Increase will amount to 2.5 billion euros, or the amount that, if applicable, results in the event of incomplete subscription. The subscription price represents a discount of c.19.6% TERP (theoretical ex-rights price) taking as reference the trading price at the close of yesterday.

Preferential subscription rights will be assigned to all Cellnex shareholders who have acquired shares until October 10, 2019 and whose transactions have been registered in Iberclear until October 14, 2019 (both inclusive). Each share currently outstanding will grant the right to receive a pre-emptive subscription right. In turn, 31 rights will be necessary to subscribe to 9 new shares.

The preferential subscription period will extend for fifteen calendar days from the day following the publication of the Capital Increase in the BORME (Official Gazette of the Commercial Registry). The pre-emptive subscription rights will be negotiable in the Stock Market Interconnection System and may be transmitted and exercised in accordance with the conditions and restrictions indicated in the corresponding prospectus, which is expected to be approved and registered by the National Securities Market Commission in the coming days.

The New Shares will confer on their holders the same political and economic rights as the Company's ordinary shares currently in circulation, from the date on which the Company declares the Capital Increase subscribed and paid.

Likewise, and in relation to the dividend policy, the company confirms that it will be maintained in its current terms.

Cellnex has signed the corresponding underwriting contract with Morgan Stanley, Goldman Sachs International and J.P. Morgan as Joint Global Coordinators and Joint Bookrunners, and Banca IMI, Banco Santander, BNP Paribas, CaixaBank BPI, Citi, Deutsche Bank, HSBC and Mediobanca as Joint Bookrunners, and Banco Sabadell and Société Générale as Co-Leads.