New Zealand mobile carrier Spark has announced the sale of its remaining 17 percent stake in its mobile tower unit Connexa to global investment group CDPQ for NZ$314 million ($181m).
In an announcement, the company said that it expects a gain of around NZ$70 million ($40.5m) in reported EBITDAI ( Earnings before finance income and expense, income tax, depreciation, amortization, and net investment income) on completion of the sale of the stake.
Connexa has operated separately from Spark, since the operator sold a 70 percent stake in its passive mobile infrastructure assets to the Ontario Teachers’ Pension Plan in July 2022. The transaction was finalized in October 2022 for NZ $900 million ($573m).
As part of the sale, Connexa's majority owner, Ontario Teachers' Pension Plan will also sell 33 percent of its shareholding to CDPQ.
On completion of the transaction Ontario Teachers’ and CDPQ will each hold a 50 percent co-controlling interest in Connexa.
"In October we announced a review of our non-core assets and our intention to divest our remaining shareholding in mobile towers business Connexa to further strengthen our balance sheet," said Spark New Zealand CEO, Jolie Hodson.
“The sale to CDPQ, a high-caliber global investment group, reflects the high quality of this asset and will ensure, alongside existing owner Ontario Teachers', Connexa remains well positioned to deliver its services to customers, including Spark.”
The announcement of the planned sale is no surprise, given Spark revealed in a previous earnings guidance that it was working to sell its stake in tower business Connexa less than two months ago.
Spark noted that it will remain a key customer of Connexa, and will work with the tower company to deploy its mobile network.
The company said it will also continue to own all the 'smarts' of the network – such as radio equipment and spectrum.
The transaction remains subject to Overseas Investment Office approval, with the deal expected to be completed during the third quarter for the full year 2025. Once completed, Spark's two appointed directors will resign from the Connexa board.
Last year, Connexa completed the acquisition of 2degrees Networks Limited's passive telco tower assets from its owners Macquarie Asset Management and Aware Super Limited for NZ$1.1 billion ($666m).
The carrier did note, however, that it will remain focused on delivering growth to its shareholder value through its data center strategy.
In April of last year, the telco announced a three-year strategy to invest between $156 million to $189 million in data centers.