Vodafone to sell passive tower assets and IFT reinvestment

Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
18 July 2022


Vodafone to sell its passive mobile tower assets alongside Infratil reinvestment

Vodafone New Zealand Limited (‘Vodafone NZ’), together with shareholders Infratil Limited (‘Infratil’)
and Brookfield Asset Management Inc. (‘Brookfield’), announce the sale of Vodafone NZ’s passive
mobile tower assets for $1,700 million to funds managed, or advised, by leading global investors
InfraRed Capital Partners (40%) and Northleaf Capital Partners (40%). This represents a FY2023
pro-forma EBITDA multiple of 33.8x
1
.

As part of the transaction, Infratil will reinvest to hold 20% in the new TowerCo.

The new TowerCo business comprises 1,484 wholly owned mobile towers and will be the largest New
Zealand towers business, covering over 98% of New Zealand’s population.

Under the terms of the deal, which is subject to Overseas Investment Office approval and completion
of certain reorganisation steps, the new TowerCo will enter into a 20-year master services agreement
with Vodafone NZ (with extension rights) providing Vodafone with access to both existing and new
towers, and a commitment from TowerCo to build at least 390 additional sites over the next ten years
to enhance Vodafone’s relative coverage and capacity position.

Vodafone will continue to own the active parts of its network, including the radio access equipment
and spectrum assets, maintaining an industry leading mobile coverage and network position.

The new TowerCo structure allows for separate and specialised ownership of the passive mobile
towers, providing strong incentives to drive better capital efficiency, which will include increased co-
location of equipment on common tower assets. This is essential as demand for data and connectivity
continues to grow year on year, driving the importance of more intensified digital infrastructure to
meet community needs. It will allow Vodafone to focus on its core strategic objectives, accelerating
the roll out of active network technology.

Infratil Chief Executive Jason Boyes said, “We are delighted with this outcome, which highlights again
why Vodafone is an excellent Infratil investment. We have unlocked a significant portion of the value
of our original equity invested in Vodafone, whilst retaining that investment and a 20% stake in
TowerCo. InfraRed Capital Partners and Northleaf Capital are high-calibre investors who share our
vision for what the new TowerCo can deliver across New Zealand. The transaction is a win-win for
Infratil shareholders.”

Brookfield Infrastructure Managing Director Udhay Mathialagan said, “This transaction is a material
milestone in the execution of our strategic program to increase use of assets at Vodafone NZ,
releasing capital from the network when it makes sense and conditions are supportive and through
targeted partnerships around infrastructure. This partnership will enhance site choices for wireless
operators in New Zealand whilst supporting a strong return on our equity invested in Vodafone NZ
three years ago”



1
FY23 forecast EBITDA shown on a cash basis and not adjusted for IFRS 16.

2
Vodafone CEO Jason Paris said, “We’re pleased at the outcome of the process, which attracted
significant interest. Infratil, InfraRed Capital Partners and Northleaf Capital are outstanding investors
who share our vision for Aotearoa New Zealand and will help us to accelerate the roll out of critical
infrastructure for our customers.”

“This is a move that will further increase the coverage, capacity and speed of our network for our
customers, making our Smart Network even smarter, which was recently awarded #1 mobile network
in New Zealand by independent benchmarking company Umlaut.”

Morrison & Co’s Chief Investment Officer and Global Head of Digital and Connectivity, Will Smales,
noted that, “TowerCo represents a great opportunity for Infratil to invest in a unique, established, and
hard-to-replicate national tower network with strong partners.

“What makes this an attractive Infratil asset is that while it has long-term, inflation linked cashflows, it
is also a platform with significant growth opportunities including macro tower growth, capacity for
future co-tenancy, increased demand for new points of presence and step out opportunities such as
small cells.”

The transaction is expected to complete in the fourth quarter of the 2022 calendar year, subject to
receipt of Overseas Investment Office approval.

Estimated impact on FY2023 Guidance

On 19 May 2022, as part of its full year results announcement, Infratil provided an FY2023
Proportionate EBITDAF guidance from continuing operations of between $510 million and $550
million.

This included Infratil’s 49.95% share of Vodafone’s statutory EBITDAF of between $490 million and
$520 million from continuing operations. This is not expected to materially change due to the
accounting treatment of the lease payments to TowerCo, which will be recognised in interest and
depreciation.

Shareholder Returns

In May 2019, Infratil and Brookfield each acquired a 49.95% stake in Vodafone NZ for NZ$1,029.7
million. Based on the 31 March 2022 independent valuation Infratil expects to have generated a
26.7% IRR on its investment in Vodafone following completion of the transaction.

No incentive fees are payable to Infratil’s manager Morrison & Co in relation to the investments in
Vodafone NZ or Aotearoa Towers Group LP.



Enquiries should be directed to:
Matthew Ross
Infratil Finance Director
Phone: +64 274211152
Email: matthew.ross@hrlmorrison.com