Altice Raises €1.8B From SFR FTTH Stake Sale

News Wire Feed Light Reading 11/30/2018

AMSTERDAM -- Altice Europe N.V. (Euronext ATC, ATCB) (“Altice Europe”) announces today that its subsidiary Altice France has entered into an exclusivity agreement with Allianz Capital Partners (“ACP”), AXA Investment Managers - Real Assets, acting on behalf of its clients (“AXA IM – Real Assets”), OMERS Infrastructure (“Omers”), (together the “Partners”) regarding the sale of a minority equity stake of 49.99% in SFR FTTH for a total cash consideration of €1.8 billion based on a €3.6 billion1 equity value.

With 5 million homes to be passed (including 1 million homes built by year-end) and more to be franchised or acquired, SFR FTTH is the largest alternative FTTH infrastructure wholesale operator in France.

SFR FTTH will sell wholesale services to all operators at the same terms and conditions including SFR as customer with no minimum volume commitments.

Altice France will sell technical services to SFR FTTH for the construction, the subscriber connection and the maintenance of its FTTH network.

SFR FTTH will deploy fibre massively in the next 4 years, at least 1 million homes passed per year which will provide growth for SFR in France.

Patrick Drahi, founder of Altice, said: “I am very pleased that three of the most renowned infrastructure investors in the world are becoming our partners and committing large resources to build the leading FTTH wholesaler in Europe.

With this transformational transaction and the various tower sales and partnerships announced earlier this year, Altice Europe has been able to crystallize €8 billion of infrastructure value and obtain cash proceeds of €4 billion in total in a few months. Through these transactions, Altice France and Altice Europe will deleverage and will have access to new and cheaper liquidity to invest in its fibre infrastructure.

This transaction is creating huge value for our group, providing more fibre to our customers and more revenues and liquidities to our companies. Thanks to its fibre strategy, SFR will grow and deleverage from 2019.”

Industrial Considerations

First transaction of this type in Europe and creation of one of the largest European FTTH wholesalers in Europe.

Creation of the only nationwide infrastructure challenger to the incumbent with a very strong competitive position on its footprint. SFR FTTH will provide the best resources, structure and organization to accelerate the deployment of FTTH in medium and low dense areas in France.

SFR FTTH complements Altice France’s other fixed infrastructure assets: a fully modernized and fully owned FTTB network covering 9 million homes delivering up to 1Gb/s, and a fully-owned FTTH network of 2.5 million homes in very dense areas.

In total, SFR will cover more than 15 million homes in France and intend to expand further its network.

Financial Considerations

The transaction ascribes a premium value to infrastructure assets in early stages of deployment:

€3.6 billion equity value;

€1.8 billion cash proceeds at closing.

Through this transaction Altice France and Altice Europe will further reduce their net leverage ratios and significantly grow.

Through its majority stake, Altice France will continue to make a full network return.

Future Capex associated with the SFR FTTH roll-out is covered by a €1.8 billion non-recourse debt package to be deployed over the next 4 years off balance sheet, reducing capital intensity away from SFR. The transaction is expected to occur in H1 2019.

Altice