The Philippines' largest integrated telco PLDT on March 16 announced a new tower sale and leaseback transaction by its subsidiaries Smart Communications and Digitel Mobile Philippines involving 1,012 telecom towers and associated passive telecom infrastructure.
The company signed a sale and purchase agreement with Frontier Tower Associates Philippines for over 12.1 billion pesos (US$221.20 million), which mirrors the value of the towers covered by the sale and leaseback transactions announced in April and December 2022. The latest transaction brings the total number of towers monetized through the sale and leaseback transactions to over 7,500 for a total consideration of over 98 billion pesos.
Concurrent with the execution of the sale and purchase agreement for the disposal of 1,012 telecom towers, which are primarily located in Luzon, Smart also entered into a master services agreement with Frontier Tower on similar terms, including tenor and lease rate, as the master services agreements previously entered into by Smart in relation to the sale and leaseback deals announced in April and December 2022.
Upon completion of the transaction, Smart will lease back the towers for a period of 10 years at competitive terms as the anchor tenant. The sale and leaseback will be complemented by a commitment of 550 new points of service from Smart over the next few years, enabling Smart to further expand its network and enhance customer service.
PLDT and Smart president Alfredo Panlilio says the transaction represents another important milestone in the group’s asset-light strategy focused on operational efficiencies and best-in-class customer experience, and in support of the government’s digital roadmap for the Philippines.
The closing of the transaction will be staggered based on the number of towers being transferred – with all closings expected to be completed this year.
UBS acted as the exclusive financial adviser to PLDT and Smart on this transaction.
Frontier Tower is a subsidiary of the KKR-backed Pinnacle Towers Pte Ltd, an Asia-focused digital infrastructure platform with a strong focus on the rapidly growing Philippine market, in which KKR invested in 2020.