Quick IPO planned: Vodafone silvered radio mast subsidiary

Wednesday February 24, 2021

Rapid IPO planned
Vodafone silver-plated radio mast subsidiary

Radio masts are little gold pits for investors. They are low-maintenance and promise constant income. Vodafone now wants to benefit from the current big movement in the market.

The Vodafone subsidiary Vantage Towers wants to celebrate its debut on the Frankfurt stock exchange before the end of March. The plan was to bring a considerable minority stake to the stock exchange, announced the radio mast operator, which was only formed last year and made his plans official. "The IPO gives us access to the capital markets. That is the way forward," said Vantage Towers boss Vivek Badrinath.

The mood for IPOs is currently better than it has been for a long time. The Berlin online used car dealer Auto1 made its debut at the beginning of February and was valued at just under twelve billion euros. According to insiders, the new issue of Vantage Towers is likely to be larger – the company could be valued at up to 18 billion euros, making it the largest IPO since Siemens Healthineers debuted four years ago.

Income to reduce debt

The world's second largest wireless operator behind China Mobile will continue to hold the majority of Vantage Towers after the IPO. No new shares will be issued. The British want to use the proceeds to reduce their debts. Vantage Towers should also contribute to this in the years to come. Every year 60 percent of the recurring cash flow is to be distributed. For the current financial year, a payment of 280 million euros is due for July. The adjusted operating result (Ebitda AL) should amount to 540 million euros in the financial year at the end of March.

According to its own information, Vantage Towers has around one billion euros available for acquisitions, which could be topped up through capital increases. "There are currently no deals on the table," said Badrinath. He pointed out that the market is in great flux. "We intend to play a role." But now they want to get the IPO off the ground first.

82,000 masts in ten countries

Because of the accelerated digitization and the expensive 5G network structure, radio masts are booming. Infrastructure providers like Vantage can rent the masts on the ground and on the roofs to several telecommunications companies at the same time, which promises regular income for years. In addition, the maintenance costs are considered to be relatively low.

This recently led to numerous deals. Cellnex spent ten billion euros on almost 25,000 masts from CK Hutchison throughout Europe, while the Telefonica subsidiary Telxius sold all of its mobile communications sites to American Tower for 7.7 billion euros. The French telecom group Orange packed its radio masts in Spain and the home country into its own company and brought an IPO or sale into play.

The number of locations operated by Vantage is now 82,000 in ten European countries – most of them in Germany. This also played a role in choosing the location for the IPO. The stock market debut is being organized by the banks Bank of America, Morgan Stanley, UBS, Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies.