Rogers strikes $7bn deal with Blackstone-led group to boost balance sheet 

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The deal is designed to reduce debt and highlight the value of Rogers’ wireless infrastructure, the companies said 

Rogers Communications, one of Canada’s largest telcos, has agreed a CAD $7 billion equity investment with Blackstone and a group of major Canadian pension funds.  

Based in Toronto, Rogers provides wireless, broadband, and media services across the country. The company recently expanded its reach with the $20 billion acquisition of Shaw Communications. 

As per the new agreement, Blackstone will acquire a 49.9% non-controlling stake (with 20% voting rights) in a new Rogers subsidiary that will own a portion of its wireless backhaul transport network. Rogers will keep operational control and will consolidate the subsidiary into its financial results. 

The investor group includes CPP Investments, Caisse de dépôt et placement du Québec, PSP Investments, and British Columbia Investment Management Corporation. 

“This strategic partnership demonstrates the confidence investors have in Rogers and in our world-class assets,” said Tony Staffieri, President and CEO. “With this significant investment, we are executing on our commitment to de-lever our balance sheet.”  

“This transaction will strengthen the company’s investment grade balance sheet by reducing our borrowings and unlocking the unrecognised value of critical assets,” said Glenn Brandt, CFO in a press release. 

 “With this transaction, Rogers will have issued an aggregate $9 billion of equity-valued capital since year-end, which is expected to reduce leverage by almost 1 turn,” he continued. 

The deal gives Blackstone up to CAD $400 million in annual distributions over the first five years. Rogers will also have the option to buy back Blackstone’s stake between the eighth and twelfth years after closing. 

Credit rating agencies including Moody’s, S&P, and DBRS are expected to treat the deal as equity. Pending approval, the deal is expected to close later this quarter. 

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Author: Ernestro Casas -

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