Abertis eyes telecoms IPO(2)

The Spanish developer plans to list its tower business in 2015 as it looks to continue focusing on its core activities.

Spanish developer Abertis will continue focusing on its core business, expanding internationally, growing its toll road business and improving its balance sheet according to the new 2015-2017 strategic plan the company presented, along with its nine-month results for 2014, to investors in London on Thursday.

As part of its objective to focus on its core business segments, which the company has identified as telecommunications and toll roads, Abertis plans to launch an initial public offering of its telecoms business – currently a network of around 8,000 towers – in 2015 subject to market conditions.

“Listing this business will provide Abertis with funds to continue growing its toll road business and reinforce its commitment to financial solvency (corporate ratings) and shareholder remuneration,” Abertis said in a statement, adding that the new company will operate independently from Abertis and with its own management team.

As for its toll road business, Abertis said it will continue growing organically and through acquisitions. In terms of organic growth, the company is looking to extend concession terms of its existing toll road assets – as it did with Autovias in Brazil last month agreeing to invest an additional €30 million in exchange for a six-month extension.

Abertis is negotiating similar agreements in other markets, such as Chile, where it is considering additional investments of up to €500 million in exchange for extensions ranging from two to five years for concessions such as Autopista del Sol, Rutas del Pacifico, Autopista Los Libertadores and Elqui. Additionally, the company is in the process of finalising extensions of around 2.5 years for the Sanef and Sapn toll road networks in France in exchange for a €600 million investment.

In terms of acquisition-led growth, the company is studying various projects in its target markets in Western Europe and North America. The acquisitions will be realised only “if they do not put at risk the Group’s dividends policy or its financial strength (rating),” Abertis said.

The company plans to distribute more than €2 billion in ordinary dividends over the next three years, by increasing its ordinary dividend per share by five percent annually through 2017; maintaining its bonus share issue of one new share for every 20 existing shares; and carrying out a share buy-back programme of up to five percent.

In addition, Abertis aims to increase earnings before interest, tax, depreciation and amortisation (EBITDA) at an annual rate of eight percent over the next three years to €4.0 billion and to increase cash flow by 11 percent.

It also targets savings of up to €450 million, primarily from the Group’s units in France, Brazil and Spain, adding to the €730 million it already generated in savings between 2011 and 2014 and which it credits in part for the 5 percent year-on-year increase of its profit to €560 million year-to-date. Revenues and EBITDA were also up – 6 percent and 11 percent, respectively during the first nine months of 2014 – beating analysts’ expectations.

Organisational changes were also announced as part of the strategic plan. These include the appointment of Josep Lluis Gimenez Sevilla, previously managing director of Toll Roads Spain, to the newly-created position of managing director of industrial development.

“This new role combines many of the functions previously performed by the former resources and efficiency general manager Lluis Deulofeu with new responsibilities specifically related to developing the industrial role of the Abertis Group,” according to the statement.

Deulofeu in turn will replace Francois Gauthey as managing director of Sanef, while Antonio Espanol will succeed Gimenez Sevilla as managing director of Toll Roads Spain.

Gauthey has been appointed managing director of Toll Solutions International, Abertis’ new toll technology business.