CityFibre Infrastructure Holdings, a UK fiber-to-the-premises (FTTP) overbuilder, today announced that it has completed an equity raise of £825m ($1.1bn) from two new minority investors, Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund, and Interogo Holding, an investment vehicle for furniture company IKEA Group. Additionally, the company has increased its debt facilities by £300m ($414m), with new banks joining the syndicate.
Overall, CityFibre’s capital raise amounts to a total of £1.125bn ($1.55bn) in new equity and debt financing. In turn, this capital will help the company meet its target, by year-end 2025, to have its fiber network pass 8 million UK homes across 285 cities, towns, and villages. Also, CityFibre’s plan contemplates fiber deployments to 800k businesses, 400k public sector sites, and 250k 5G access points in the UK.
United Arab Emirates – United Kingdom Sovereign Investment Partnership (UAE-UK SIP)
Mubadala Investment Company’s equity investment into CityFibre marks the first capital deployment under the new United Arab Emirates – United Kingdom Sovereign Investment Partnership (UAE-UK SIP). Indeed, the United Arab Emirates (UAE) plans to invest £10bn ($14bn) in “priority” UK industries, as part of this agreement with the UK’s Office for Investment.
Mubadala is overseeing the UAE’s capital outlays for this sovereign investment partnership between the two nations. Specifically, the UAE is focusing its investments under the UAE-UK SIP on the sectors of energy transition, infrastructure, and technology.
Trade and Investment Relationship
The UK and the UAE’s relationship amounted to trade of £18.6bn in 2019, and two-way investment of £13.4bn in 2019.
Debt Financing – CityFibre
CityFibre’s debt financing of £300m is an extension to its existing £820m banking facilities. Notably, Crédit Agricole CIB, and National Australia Bank (NAB) are joining the debt financing syndicate. Presently, CityFibre lenders include ABN AMRO, Banca IMI (Intesa Sanpaolo), BNP Paribas, Lloyds, NatWest, and Société Générale.
CityFibre – UK Fiber-to-the-Premises (FTTP)
CityFibre is the largest alternative fiber-to-the-premises (FTTP) provider in the UK, with its network spanning 60+ towns and cities. Specifically, given that CityFibre is deploying fiber to ~1/3rd of the UK market, its two main competitors include national broadband providers BT Group (Openreach) and Virgin Media O2.
For more information on CityFibre’s overall business model, customers, financials, and competitors – check-out our recent coverage of the company here.
Ownership
Mubadala Investment Company is leading CityFibre’s £825m equity raise, alongside Interogo Holding. However, both investors will be minority shareholders in CityFibre. Presently, CityFibre’s key shareholders are Antin Infrastructure Partners (Fund III) and West Street Infrastructure Partners (Goldman Sachs’ Merchant Banking Division).
