Orange Poland has announced the creation of a FiberCo joint venture co-owned with pension fund manager APG. The 50-50 joint venture aims to support the roll-out of fibre in areas where access to broadband infrastructure is limited or non-existent. It expects to reach a total of 2.4 million lines connected to the FTTH network over the next five years.
The transaction values the joint venture at PLN 2.748 billion (EUR 605 million), following a competitive process by Orange to find a long-term partner to support the fibre roll-out. Orange Poland will receive PLN 1.374 billion from APG for the assets it contributes, with 65 percent of the payment to be made at closing and the rest between 2022 and 2026, dependent on meeting network roll-out targets.
The company plans to use the proceeds to strengthen its balance sheet, and said it will give more details in a strategy update planned for Q2. Commenting on the partnership in Poland, Mari-Noelle Jego-Laveissiere, Deputy CEO of Orange in charge of European Operations (outside France), said this partnership with APG will provide the financial backing necessary to achieve the operator's five-year fibre roll-out programme in Poland.
Orange will bring around 0.7 million existing fibre connections to the joint venture. Capex to complete the roll-out plan for 2.4 million lines in total is estimated at PLN 3 billion. The company will take out its own debt for this, without any further contribution from Orange. The deal further assumes equity contributions from each party of around PLN 300 million in 2023-2026.
The network will be open to other service providers, with Orange Poland an important customer and supplier. Orange will provide a wide range of services, including network construction management and maintenance, lease of elements of the network, as well as other support services. Orange will guarantee network construction within a fixed budget.
Orange Poland will not consolidate the investment. However, it has agreed an option with ABP to take control of the fibre company in 2027-29 by buying around 1 percent of the shares. The initial deal is expected to close by August, pending regulatory approval.
