Cellnex To Issue 192.7 M Shares At 36.33 €/Share To Increase Capital By €7Bn

The company has entered five new countries (Austria, Denmark, Poland, Portugal and Sweden) during 2020

Cellnex Telecom CEO, Tobías Martínez, assured on Monday at the 2021 General Shareholders’ Meeting that the telecoms company will grow by 21% annually until 2025, when it is expected to reach a turnover of between 4.1 and 4.3 billion euros. In this context, the company has announced the terms of the capital increase of 7 billion euros.

The exact capital increase will amount to 6.997 billion euros, with the issue of 192,619,055 new shares at a unit price of 36.33 euros. This implies a discount of 22% compared to yesterday’s closing price (17% of the price excluding subscription rights). These new shares represent 39.57% of the shares currently in circulation.

It will take 48 pre-emptive subscription rights to subscribe for 19 new shares. Meanwhile, the TERP (Theorical Ex-Right Price) will be 43.75 eur per share, i.e. the initial price of the subscription right will be 2.93 eur.

According to Renta 4 analysts, the dilution in the estimated price per share will be “significant” in view of the sharp increase in the number of shares:

“We do not believe that its share price will be adjusted to the new issue price, given the performance it has had in previous proportionally similar operations, thanks to the support from the market and its main shareholders (who in some cases, GIC, have increased their stake).”

The funds raised will be used to strengthen Cellnex’s balance sheet to enable it to expand through acquisitions. The company has a pipeline of 18 billion euros, of which nearly 9 billion have already been allocated and approximately 9.1 billion euros are still pending execution.

The pre-emptive subscription period will last 15 days and will begin on March 31.

Some shareholders, like Connect, have decided not to participate in the capital increase despite their support for the company’s expansion strategy through acquisitions. However, 27% of shareholders still back the capital increase. Furthermore, according to Renta 4:

“After the strong support from the market on previous occasions, we do not consider there is any difficulty in meeting the capital increase, which also has the guarantee of the underwriting banks.”

Cellnex Telecom’s CEO also mentioned in his speech the accounts in 2020, which reflect a 55% increase in revenues, 72% increase in Ebitda and 75% increase in recurring free cash flow.

The company has entered five new countries (Austria, Denmark, Poland, Portugal and Sweden) during 2020. Whatsmore, it has consolidated its industrial project in key markets such as France, Ireland, Italy, the Netherlands and the UK, with a confirmed global investment of 25 billion euros.