Adamo Telecom Iberia, a fiber-based broadband provider in Spain backed by the EQT Mid Market Europe fund, today announced the completion of a €600m debt refinancing, with the proceeds being directed towards expanding its fiber optic network to reach more than 3.2 million homes in rural Spain.

Notably, the EQT Mid Market Europe fund acquired the majority of Adamo in 2017.

Debt Refinancing – Adamo Telecom Iberia

Overall, ING coordinated a consortium of seven bookrunners, lead arrangers, and arrangers which have prior experience in financing fiber and telecommunications projects. In total, the below lenders committed senior debt facilities of €600m:

  • Bookrunners: ABN AMRO, ING, Société Générale, and SMBC
  • Lead Arrangers: Kommunalkredit Austria and NIBC
  • Arranger: Raiffeisen Bank International

Additionally, Adamo has the option to extend this debt refinancing by a further €300m, up to a total of €900m, through an uncommitted line.

Notably, Adamo is the second major debt refinancing, in the past 30 days, whereby a fiber portfolio company of EQT, and the bank ING, have partnered.

Use of Proceeds

The €600m refinancing by Adamo will be used in-part to repay the company’s existing debt financing of €250m, which it obtained in March 2020. Accordingly, Adamo will invest the remaining €350m of proceeds into organic expansion and acquisition of fiber networks in rural areas.

Overall, Adamo will expand its fiber network to reach over 3.2 million homes in rural Spain, in the coming years. As a point of reference, at year-end 2020, the company passed 1.4 million homes with fiber optic services.

Adamo’s refinancing proceeds will also be directed towards rural fiber investments that Adamo is carrying out as part of the support it received during 2020 by the Programa de Extensión de la Banda Ancha (PEBA) from the Government of Spain’s Ministry of Economic Affairs and Digital Transformation.

Strategy – EQT’s Adamo Deploys Fiber-to-the-Home in Spain

Adamo offers fiber-based broadband which delivers speeds of up to 1 gigabit per second. The company’s strategy centers on deploying its network in rural areas of Spain where there is often i) no high-speed internet access and/or ii) no service from other broadband providers.

Fiber Roll-Out

Adamo employs a partnership model to roll-out its fiber network. Specifically, this includes agreements with local partners, which allows Adamo to minimize execution risk and gain cost efficiencies.

The company works in each of its coverage areas (see below) with a local partner. In turn, this allows Adamo to expand its fiber network faster, at a pacing of 30k rural homes per month.

Deployment of fiber in Spain benefits from inexpensive overhead duct availability. This allows for fiber roll-outs with relatively low capital expenditures per passing, as compared to other European countries.

Geographic Coverage

Overall, Adamo has its own fiber infrastructure in Catalonia (includes Barcelona), Madrid, Valencia, Seville, Cantabria, Navarra, Castilla-La Mancha, Castilla y León, Extremadura, La Rioja, and Lugo.

Open Access Wholesale Fiber Network

Adamo’s fiber network is open to all third-party operators. Presently, Adamo provides connectivity services, through its fiber-to-the-home (FTTH) network, to four of Spain’s national operators and 160+ local operators.

Inherently, by offering this wholesale fiber network access to other operators, Adamo is enhancing the infrastructure characteristics of its business.

Transaction Advisors

Adamo Telecom Iberia’s legal advisor was Allen & Overy. Additionally, the ING-led debt financing consortium’s legal advisor was Clifford Chance.

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