Virgin Media O2 reduces its stake in Cornerstone Towers, selling to Equitix for £186m.
- The sale involves a significant 16.66% stake in a holding firm for Cornerstone.
- Virgin Media O2 retains over a 25% share in Cornerstone post-transaction.
- This strategy reflects a telecom trend towards debt reduction and capital raising.
- Despite asset sales, Virgin Media O2 faces a 2.4% revenue decline in Q3.
Virgin Media O2 has confirmed the sale of a portion of its stake in Cornerstone, a joint venture for mobile towers, to Equitix, an infrastructure investment firm, for £186 million. This transaction follows the company’s decision to offload an 8.33% share, leaving it with just over 25% ownership in Cornerstone. The deal also includes a broader 16.66% interest in a parent entity that holds half of Cornerstone.
Equitix’s Chief Investment Officer, Achal Bhuwania, described Cornerstone as “the UK’s largest telecom tower portfolio” and emphasised its importance as a piece of “critical national infrastructure,” central to their strategy of investing in core infrastructures. This sale is part of a larger pattern observed in the telecom sector, where companies aim to reduce debt and generate capital for large-scale investment projects.
Previously, Virgin Media O2 had engaged in a similar divestment, selling a 16.67% stake in Cornerstone to GLIL Infrastructure, raising £360 million. CEO Lutz Schuler explained that the recent divestiture aligns with their strategic goal of monetising infrastructure while retaining control over key assets. He highlighted the company’s progress in deploying 5G and fibre networks, noting a £1.5 billion investment towards network improvements this year alone.
The third quarter saw Virgin Media O2 expanding its fibre network to 281,100 additional premises, increasing by 44% compared to last year. Meanwhile, 5G coverage now reaches 68% of the UK population. However, the company, co-owned by Liberty Global and Spain’s Telefonica, reported a 2.4% decrease in revenue for the third quarter, standing at £2.7 billion. This decline is attributed to a fall in handset sales, along with a 4.1% drop in adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) to £1 billion.
Despite these financial challenges, Lutz Schuler stated that the company is on track to meet EBITDA guidance, maintaining confidence in their financial strategy. The emphasis remains on targeted investments in critical growth sectors as they approach the year’s end.
Virgin Media O2 continues its strategic asset sales amid market shifts, while progressing in network expansion and financial stability.
