CityFibre to gain more than £2bn in financing round

CityFibre has reached agreement with its shareholders and existing lenders on a major £2.3bn financing round to accelerate its next phase of growth.

The financing includes £500m in equity secured from CityFibre shareholders, Infrastructure at Goldman Sachs Alternatives, Antin Infrastructure Partners, Mubadala Investment Company and Interogo Holding. According to the full-fibre platform provider, this backing signifies continued commitment to CityFibre’s long-term strategy and the company’s role in providing critical digital infrastructure across the UK.

CityFibre has also agreed a committed £960m expansion of its existing debt facilities, supported by lenders including ABN AMRO, BBVA, Crédit Agricole CIB, ING, Intesa Sanpaolo IMI CIB, Lloyds, the National Wealth Fund, NatWest, SEB and Société Générale. An accordion facility of £800m is being made available to help drive CityFibre’s continued expansion through the acquisition of full-fibre network assets. This facility will be used to finance the company’s M&A pipeline and cement its position as the sector consolidator.

The debt facility will see use in supporting CityFibre’s continued network investment and enable it to continue its current infrastructure deployment work.

“This round of financing will supercharge CityFibre’s next phase of growth, as we consolidate the altnet sector, accelerate the pace of customer connections and unleash the full power of our market-leading 10Gbps XGS-PON network, for the benefit of all our partners, their customers and for the UK economy,” said CityFibre CEO Greg Mesch, commenting on the investment.

“There is huge opportunity ahead for CityFibre and it is testament to the success of the company that we have such strong backing from our lenders and shareholders. This multibillion-pound investment into critical digital infrastructure will deliver significant benefits across the UK, helping to realise potential and unlocking economic growth.”

Peter Kyle, secretary of state for Science, Innovation and Technology, added: “This investment in CityFibre is welcome news. It’s proof that our telecoms industry is driving investment into the UK, as well as building the digital foundations that will serve generations to come. 

“The success of the UK’s network providers will help to accelerate the roll-out of gigabit-capable broadband to millions of homes and businesses across the country…This sector is critical not just to improving internet speeds, but to transforming quality of life for communities and creating opportunities in every part of the country.”

The past 12 months have seen significant activity for CityFibre, which has reached more than 4.5 million premises with its full-fibre network, over halfway to its stated target. In addition to announcing its first full-year of profitability, the company launched full-fibre services for Sky and Gigafast+ across its nationwide network, the integration of Lit Fibre and the acquisition of Connexin’s full-fibre infrastructure.

In recent weeks, CityFibre revealed a wholesale multi-gig broadband product that will enable internet service providers (ISPs) to offer residential and business customers connectivity with symmetrical speeds of 5.5Gbps, and it has tripled the availability of its dedicated, enterprise-grade Ethernet services to serve more than 260,000 UK businesses. The latter roll-out incorporates a dedicated business ethernet platform and is supplied by CityFibre’s engineering partner Calix. It is designed specifically to support enterprise-grade service guarantees and brings CityFibre’s full FTTP network online for its Business ISPs.