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Orange sells shares in Światłowód Inwestycje to APG. The cost of the deal was 1.37 billion Polish zlotys, Julian Ducarros

In the stock exchange announcement Orange Polska It has been described that telecommunications will bring existing optical fiber lines into Światłowód investments of about 0.7 million households and will purchase wholesale access for about 160 thousand. Their current clients are in these areas.

In addition, Orange Polska will sell 50 percent of its shares to the Dutch fund APG. Shares of Światłowód Inwestycji for 1.374 billion PLN. Of this amount, 887 million PLN will be paid at the moment of closing the deal (subject to the model settlements), and the remaining 487 million PLN will be settled in the years 2022-2026, and it will be conditional on the implementation of the agreed schedule for the construction of the network. The deal envisages that in the years 2023-2026, each partner will contribute approximately 300 million PLN from the capital of the company – described.

Orange Polska will have approximately one additional professional purchase option in the years 2027-2029. Shares in Światłowód Inwestycje.

The deal must be closed by the end of August of this year. Orange Polska announced that it will “announce the expected impact of this transaction on the financial statements as soon as possible”.

Orange and APG want to connect 1.7 million homes with optical fibers

The announcement announced that Światłowód Inwestycje will build a fiber optic network for about 1.7 million households, especially in low or mid-competition regions. There is no indication of when this will happen.

“The further expansion of the fiber network in regions with low or medium competition in the open model will create the best conditions for fast customer acquisition, enabling Orange Polska to make investments in the fiber network through retail and wholesale activities,” Telekom confirmed.

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However, it was noted that the investment spending of the new company is estimated at 3 billion PLN. The company mainly finances it from its own debt, which is not guaranteed by Orange Polska.

– Orange Polska will be an important customer and supplier of Światłowód Inwestycje, offering a wide range of services, including network construction, maintenance management, network item leasing and other support services. Orange Polska will ensure that the network is built within the agreed budget – mentioned in the release.

– I am glad that we have started cooperation with APG, which sees, like us, the market potential of optical fiber infrastructure in Poland. In recent years, Orange Polska has implemented a very ambitious investment plan, and there are 5 million households across the country within reach of Orange Światłowodu. The needs remain enormous and the epidemic has made them even worse. Optical fiber investments will help reach more difficult areas, where there is still a shortage of quality internet, without the use of public funds. I am convinced that it will contribute to developing the country’s economy, digital infrastructure and fighting digital exclusion – comments Julian Ducarrose, President of Orange Polska.

The orange optical fiber and APG can be used by other operators

Światłowód Inwestycje will only be a wholesale operator. This means that Orange Polska and other operators will be able to access this network to provide retail services to their customers.

– Światłowód Inwestycje is a new process model that will not only depend on the high demand for high-speed Internet in Poland, but above all on the unique knowledge and experience of Orange Polska in building infrastructure and providing fiber optic services. It’s a project that will benefit everyone: customers, operators and the entire telecommunications market in Poland – says Maciej Nowohonski, Orange Polska Board Member for the Wholesale Market.

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Regarding the deal, APG was notified by Barclays, Freshfields Bruckhaus Deringer, Altman Solon and Deloitte, and Orange Polska was notified by Lazard, Linklaters, Arthur D. Little and PWC.

In February this year. Orange Polska reported that its revenue in 2020 increased by 0.9%. To 11.51 billion Polish zlotys, investment expenditures – from 1.7 Polish zlotys to 1.8 billion Polish zlotys, and net profit decreased from 82 Polish zlotys to 42 million Polish zlotys. At the end of last year, Telecom had 1.48 million affiliate offers and 725,000 users. The Internet with optical fibers. Encouraged by the high demand among customers, we are planning more investments in this area, but in a different form. The FiberCo project is progressing according to plan, as described by Head of Communications, Julian Ducarose.