CityFibre has reached agreement with its shareholders and existing lenders to secure £2.3 billion in financing and debt facilities.
The finance puts an end to speculation of a summer shortfall for the UK’s largest independent full fibre platform, which has recently begun a major distribution agreement with Sky.
The financing includes £500m in new equity secured from CityFibre shareholders, Infrastructure at Goldman Sachs Alternatives, Antin Infrastructure Partners, Mubadala Investment Company and Interogo Holding.
CityFibre has also agreed a committed £960m expansion of its existing debt facilities, supported by lenders including ABN AMRO, BBVA, Crédit Agricole CIB, ING, Intesa Sanpaolo IMI CIB, Lloyds, the National Wealth Fund, NatWest, SEB and Société Générale.
“This round of financing will supercharge CityFibre’s next phase of growth, as we consolidate the altnet sector, accelerate the pace of customer connections and unleash the full power of our market-leading 10Gb XGS-PON network, for the benefit of all our partners, their customers and for the UK economy,” said Greg Mesch, CEO of CityFibre.
“There is huge opportunity ahead for CityFibre and it is testament to the success of the company that we have such strong backing from our lenders and shareholders. This multi-billion-pound investment into critical digital infrastructure will deliver significant benefits across the UK, helping to realise potential and unlocking economic growth.”
An accordion facility of £800m is also being made available to help drive CityFibre’s continued expansion through the acquisition of full fibre network assets. An accordion facility allows the borrower to increase the total available credit under the existing credit facility without needing to renegotiate the entire agreement. It will be used to finance the company’s M&A pipeline and cement its position as the sector consolidator.
Chancellor of the Exchequer, Rachel Reeves, said investment in digital infrastructure was key to growing the economy: “Today’s announcement shows Britain is attracting billions of pounds of investment, including through the National Wealth Fund, driving growth across British businesses.”
In a note to subscribers Enders Analysis said: “This capital raise will not be the first of many across the altnet sector in our view, as CityFibre’s business model is unique, and now partially dependent on the struggles of others to encourage consolidation.
“CityFibre now has all the pieces in place to accelerate consolidation of the altnet sector, which will ultimately benefit the whole sector in ending unsustainable retail altnet competition.”
