Virgin Media O2 has sold a £186m stake in its mobile masts business as the telecoms giant scrambles to pay down debt.
The company, which is jointly owned by US telecoms company Liberty Global and Spain’s Telefonica, has agreed to sell a stake of just over 8pc in Cornerstone, its masts business, to Equitix, the infrastructure investment firm.
The deal will leave VMO2 with a 25pc stake in the joint venture, which has a network of around 20,000 mobile masts across the UK. Vantage Towers, a mobile masts business backed by Vodafone, holds around 50pc.
The sell-off comes as VMO2 looks to reduce its debt pile of more than £20bn, which was built up after the company formed in a £31bn merger three years ago. Rising interest rates have caused the cost of servicing its debt to soar. VMO2 last year sold a £360m stake in Cornerstone to GLIL Infrastructure, the London-based investment fund.
Lutz Schuler, chief executive of VMO2, said: “This additional minority stake sale follows the same logic and strategic rationale as our previous deal, allowing us to successfully monetise our infrastructure while retaining a controlling share in an important asset.
“Equitix is another strong partner to have onboard that clearly sees the long-term value in Cornerstone at a time when we are investing billions of pounds to enhance 4G coverage and bring 5G to new areas of the country.”
Mobile network operators established joint ventures for their tower assets in an effort to reduce costs. Rising competition and narrowing margins across the sector mean they have increasingly looked to extract cash from these valuable infrastructure assets in recent years.