PARTNER COMMUNICATIONS ANNOUNCES ENTERING INTO AN AGREEMENT WITH BEZEQ FOR THE PURCHASE OF AN INDEFEASIBLE RIGHT OF USE OF FIBER-OPTIC INFRASTRUCTURE LINES
Partner Communications Company Ltd. (NASDAQ: PTNR) announced an agreement with Bezeq for a 15-year right of use for 120,000 fiber optic lines. The deal, executed on December 21, 2022, totals approximately NIS 574 million plus VAT, paid in five equal installments starting January 1, 2023. Annual maintenance fees will be 4% of the total consideration. An option for an additional 48,000 lines and two 5-year extensions is included. The agreement also features price protection and upgrade mechanisms for the fiber lines.
- Long-term agreement for 15 years provides stable infrastructure access.
- Opportunity to purchase an additional 48,000 fiber optic lines under similar terms may enhance operational capacity.
- Price protection and upgrade mechanisms could improve financial performance over time.
- Significant upfront cost of approximately NIS 574 million could impact cash flow.
- Annual maintenance fees at a rate of 4% of total consideration increase long-term financial obligations.
ROSH HA'AYIN, Israel, Dec. 22, 2022 /PRNewswire/ -- Partner Communications Company Ltd. ("Partner" or "the Company") (NASDAQ: PTNR) (TASE: PTNR), a leading Israeli communications operator, announced today that on December 21, 2022 an agreement was executed between the Company and Bezeq - the Israel Telecommunication Corp. Ltd. ("Bezeq" and "The Agreement"), regarding the purchase of an indefeasible and irrevocable right of use (IRU) for 15 years of 120 thousand non-specific fiber optic infrastructure lines in buildings connected to Bezeq's fiber-optic infrastructure ("The First Agreement Period" and "Fiber Optic Lines").
In accordance with the Agreement, the right to use the Fiber Optic Lines will be granted in 5 equal annual installments, with the first installment beginning on January 1, 2023. The total consideration that the Company will pay Bezeq for the right of use in accordance with the Agreement is approximately NIS 574 million plus VAT for the First Agreement Period ("the Consideration"), that will be divided into five equal payments (in accordance with the above-mentioned installment dates), that will be paid at the beginning of each calendar year of the years 2023 until 2027, plus half of the linkage differences, and all in accordance with the terms set forth in the Agreement ("The Installment Amount"). The Company has the option to divide each Installment Amount over a period of five years, with interest to be added at a rate equal to Bezeq's NIS bond yield at the relevant average duration that will be known at the date of right of use of the Fiber Optic Lines for that installment.
The Company will also pay annual maintenance fees at a rate of
The Company has been provided with an option to purchase the right to use 48 thousand additional Fiber Optic Lines, under the same terms, during the First Agreement Period, as well as an option to extend the period of use for two additional 5-year periods each, beyond the First Agreement Period (in total 25 years), at a lower cost per Fiber Optic Line than during the First Agreement Period.
In addition, the Company has the option to bring forward both the dates of the right of use of the Fiber Optic Lines and the payments for them. The Agreement also contains a price protection mechanism that weighs the regulatory price for a line, starting from the sixth year of the Agreement, as well as an upgrade mechanism of the Fiber Optic Lines rate, in accordance with the terms set forth in the Agreement.
Forward-Looking Statements
This press release includes forward-looking statements, as this term is defined in Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of the US Private Securities Litigation Reform Act of 1995. Words such as "will", "believe", "anticipate", "expect", "intend", "strive", "seek", "plan", "could", "may", "foresee", "target", "objective", "goal", declensions thereof and similar expressions typically convey forward-looking statements, but these words are not the only words that convey these statements. We have based these forward-looking statements on our current knowledge and our present beliefs and expectations regarding possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Partner Communications
Partner Communications Company Ltd. is a leading Israeli provider of telecommunications services (cellular, fixed-line telephony, internet and television services). Partner's ADSs are quoted on the NASDAQ Global Select Market™ and its shares are traded on the Tel Aviv Stock Exchange (NASDAQ: PTNR) (TASE: PTNR).
For more information about Partner see: http://www.partner.co.il/en/Investors-Relations/lobby
Contact:
Sigal Tzadok Acting Chief Financial Officer Tel: +972 (54) 781 4958 | Amir Adar Head of Investor Relations & Corporate Projects Tel: +972 (54) 781 5051 E-mail: investors@partner.co.il |
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