A consortium of Australian institutional investors, led by the Future Fund, will acquire a 49% stake in local telecommunications giant Telstra Ltd.'s mobile tower business for more than A$2.8 billion ($2.1 billion).
Future Fund, the country's Melbourne-based A$178.6 billion sovereign wealth fund, said in a news release Wednesday that its stake in Telstra InfraCo Towers will be larger than those of consortium partners Sunsuper — a A$90 billion, Brisbane-based fund — and Commonwealth Superannuation Corp., which serves government employees and defense force members. Further details on CSC were not available.
A Future Fund spokesman declined to provide further details about their respective stakes.
The spokesman said the A$2.8 billion acquisition price includes leverage but declined to provide precise figures.
The consortium's investment will be managed by Sydney-based infrastructure and property investment firm H.R.L Morrison & Co.
Telstra InfraCo Towers operates 8,200 telecommunications towers in Australia, including "over 5,500 mobile towers supporting critical digital infrastructure throughout Australia," the news release said.
The deal, which is expected to be completed by September, will add to Future Fund's extensive infrastructure holdings, strengthening "our exposure to digital infrastructure and the long-term thematic of data growth," CEO Raphael Arndt said in the news release.
As of March 31, the Future Fund reported an allocation of 7.3%, or A$13 billion, to infrastructure and timberland.
Alison Tarditi, CSC's chief investment officer, in the same news release said the investment will provide "our customers with high-quality, inflation-linked cash flows and capital growth generated through the provision of essential infrastructure to an increasingly digital economy."
A Telstra news release said half of the A$2.8 billion proceeds would be returned to shareholders during the fiscal year through June 30, 2022, with A$75 million to be deployed to "further enhance connectivity in regional Australia" and much of the rest being used to retire Telstra InfraCo Towers' outstanding debt.
Telstra's share price Wednesday rose 4.44% to A$3.76.
