Cellnex Irish Unit Sale Faces Phase 2 Investigation; Not A Spread Mover

Rating: NR/BBB-/BBB-

• The EUR 970mn proceeds are flagged for deleveraging and would reduce Q1 leverage of 6.93x to 6.61x (our calculation, not considering EBITDA impact) against a target of 5-6x by 2025-2026.
• CCPC to conduct full Phase 2 investigation into the proposed sale of Cellnex’s Irish Unit to Phoenix Tower International, notified in March 2024.
• Cellnex had been hoping to avoid a phase 2 investigation though had considered the possibility and had assumed a delay to end-2024/start-2025 should a phase 2 investigation be called.
  
  
• At Q124 earnings call the CEO commented on the timings of the Irish sale; “It's very much depending -- there are a couple of factors. One depends if the process will go to Phase 2 or if it is going to be closed to Phase 1. So, let's be pessimistic. So, let's make the worst-case scenario. The worst-case scenario is it goes to Phase 2. And if it goes to Phase 2, it should be around year-end, maximum beginning of the next year. So, a process should last -- a Phase 2 process should last sort of nine months. We filed in March. So, it should drive us to the year-end, more or less. So, this is the worst case of a Phase 2.”