Liberty LatAm sells towers to Phoenix Tower Int’l for $355M, reports 3Q results
Liberty Latin America, the parent company of Liberty Puerto Rico, announced it has reached an agreement with Phoenix Tower International to sell 1,300 cellular towers across Panama, Jamaica, The Bahamas, Puerto Rico, Barbados and the British Virgin Islands for $355 million.
The transaction also provides an agreement to extend coverage with 500 sites being built by Liberty Latin America and PTI over the next five years, officials said.
Including these commitments, the total proceeds will increase to $407 million.
Liberty officials said the proceeds would be used for debt reduction and further investment in the company’s businesses.
“We’re pleased to work with a high-quality partner with extensive operating experience in our region in PTI and reach an agreement that crystallizes the value of our mobile tower infrastructure assets,” said Liberty Latin America CEO Balan Nair.
“In addition, the long-term lease agreements and ongoing coverage extension will enable us to continue delivering leading mobile services to our customers and support network expansion including future 5G deployment plans across the Caribbean and Latin America, while lowering capital costs associated with these assets,” he said.
“This deal is a great example of our disciplined approach to delivering shareholder value through free cash flow accretive transactions,” Nair added.
The terms of the transaction include long-term master lease agreements for each market for Liberty’s continued use of the telecom tower infrastructure after the transaction closes, which is subject to customary conditions and certain government approvals. It is expected to close within three to six months.
“PTI is excited to partner with Liberty Latin America and expand its presence in the Caribbean and Panama,” said Dagan Kasavana, CEO of Phoenix Tower International. “This transaction strengthens PTI’s presence in existing markets while representing new market expansion for PTI in the markets of The Bahamas, BVI, and Barbados.”
“As the largest independent owner of wireless towers in the Americas, we look forward to enhancing wireless access in these markets by serving all our wireless customers and the populations of the region with better connectivity and solutions to help our business partners achieve their goals,” said Kasanava.
Baker Botts LLP served as legal counsel and PJT Partners assisted Liberty Latin America as part of its ongoing financial advice to the company. Choate, Hall & Stewart LLP served as legal counsel and Mizuho Americas acted as financial adviser to PTI.
Liberty reports 3Q results
In related news, Liberty Latin America reported $1 billion in revenue, $163 million of operating income and $428 million in adjusted operating income before depreciation and amortization in the third quarter ended Sept. 30. That result included $351.2 million in income from Liberty Puerto Rico, according to the latest report.
“We continue to make progress on our integration and with the migration of mobile subscribers in Puerto Rico and the USVI. To date, we have migrated approximately 225,000 subscribers and just launched sales efforts for prepaid products on our new platform,” said Nair.
“Our latest postpaid offerings are also gaining traction with iPhone 15 sales and shipments exceeding the iPhone 14 launch by more than 50%. And our fixed services year-to-date revenue growth is at 5%, which bodes well for when we can sell a bundled offering in 2024,” he said.
Nair said Liberty is partnering with AT&T to extend its migration window by four months through the end of April.
“By extending the window, we expect to enhance the migration of incompatible handsets, integrate all iPhone and Samsung software upgrades, complete all B2B account migrations and importantly, minimize changes and disruptions during the holiday season,” he added.
Liberty Puerto Rico’s quarterly results show residential fixed revenue growth of 10% due to higher returns following rate increases and the negative prior-year impact of credits issued to customers due to power outages related to Hurricane Fiona.
Meanwhile, residential mobile revenue was 10% lower compared to the prior-year period. This was driven by lower returns from mobile services due to a higher number of low cost and discounted plans and the impact of higher contract asset amortization; lower roaming revenue; and a decline in the average number of prepaid mobile subscribers, the carrier noted.