(RTTNews) – Dutch mobile telecommunications company Royal KPN NV (KKPNY.PK, KPN) on Tuesday announced that it has reached an agreement with pension investor APG Group to form a joint venture, which will speed up the process of fiber deployment and accelerate digitization across the Netherlands.
Under the deal, APG will pay around 440 million euros on a pre-tax basis for a 50 percent stake in the joint venture. This will be divided into an initial payment of 220 million euros and the remaining 220 million euros to be paid in annual installments, depending on the progress of the deployment. The joint venture has a total capital value of 880 million euros.
During the deployment period, the joint venture’s capital expenditure will be around 1.2 billion euros, 70% funded by non-recourse debt. The upfront payment will cover KPN’s share of the expected contributions to the capital of the joint venture.
The deal is now subject to regulatory approval and the joint venture will begin operations in the second quarter of the year.
With this joint venture, KPN plans to increase its service revenues and make its presence felt in sparsely populated areas of the Netherlands. KPN has the potential to obtain, control and reconsolidate in the future.
In the Netherlands, KPN shares traded at 2.774 euros, down 4.3%.
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