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KPN, APG To Form Dutch Joint Venture For Fiber Rollout

Dutch mobile telecommunications company Royal KPN N.V. (KKPNY.PK,KPN) said on Tuesday that it has reached an agreement with pension investor APG Group to form a joint venture, which will speed up the process of rollout of fiber and faster digitalization across the Netherlands.

As per the deal, APG will pay around 440 million euros on a pre-tax basis for a 50 percent stake in the joint venture. This will be split into an initial payment of 220 million euros and the remaining 220 million euros to paid in yearly instalments, depending on the progress of the rollout. The joint venture has a total equity value of 880 million euros.

During the rollout period, the capex of the joint venture will be around 1.2 billion euros, financed with 70 percent debt on a non-recourse basis. The initial payment will cover KPN's portion of expected equity contributions in the joint venture.

The deal is now subject to regulatory approval and the joint venture will begin operations in the second quarter of the year.

With this joint venture, KPN plans to increase its service revenues and make its presence felt in thinly populated areas in Netherlands. KPN has the potential to obtain, control and reconsolidate in the future.

In Netherlands, KPN shares were trading at 2.774 euros, down 4.3 percent.

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