Macquarie Capital explores selling stake in Philippine telecom tower company – report

Barely two months after the completion of the merger between PhilTower Consortium (PhilTower) and Miescor Infrastructure Development Corporation (MIDC), one of the major investors in the yet-to-be-named entity is reportedly mulling the sale of its stake in the combined company.

Citing sources familiar with the matter, Bloomberg (paywall applies) reported on Friday that Macquarie Capital is exploring a possible sale of its 45% stake in one of the Philippines' largest independent telecommunications tower companies in a deal that could be valued between $700 million and $800 million.

The Philippine telecom tower company currently operates more than 3,300 towers nationwide and has a pipeline of more than 2,100 committed orders. In addition to Macquarie Capital, other investors in the consortium owning the combined company include Stonepeak, Manila Electric Company (Meralco) and Global Network Inc. The company counts the Philippines' three mobile operators – Globe Telecom, Smart and Dito Telecom – as its main customers.

The Australian investment firm, which is part of the Macquarie Group, is said to be working with a financial adviser on the potential divestment, as other infrastructure-focused funds have shown preliminary interest in acquiring the stake.

Related:Globe tower buyers form JV to boost Philippine 4G and 5G coverage

According to Bloomberg, discussions are ongoing and Macquarie Capital may decide to keep its investment.

Banking on the government's tower sharing initiative

Prior to the merger, PhilTower and MIDC acquired the tower assets of local mobile operator Globe Telecom in a sale-and-leaseback deal two years ago, at the height of the Asia-Pacific telecom tower sales frenzy.

The sale and leaseback of tower assets is in line with the Philippine government's tower sharing initiative, which allows operators to expand their coverage without building additional infrastructure.

A 2022 study found that the country's telecom operators could save up to $1.15 billion in capital and operating expenses by 2025 through tower sharing.

PhilTower agreed to pay 20 billion Philippine pesos (US$357.36 million) for Globe's 1,350 towers, backed by Macquarie Capital, which provided 100% of the equity for the acquisition. Macquarie Capital has been a shareholder in PhilTower since 2021.

On the other hand, MIDC agreed to pay PHP26 billion ($464.57 million) for Globe's 2,180 towers. MIDC is a joint venture between Meralco Industrial Engineering Services Corp (Miescor) and Stonepeak, which was formed in 2022.