CityFibre, a prominent infrastructure provider and a key competitor to the UK’s Openreach, has announced an impressive £2.3 billion funding infusion. This substantial financial package includes £500 million in new equity from current shareholders and a significant £960 million extension to existing debt facilities. The funds aim to boost CityFibre’s expansion and consolidation efforts in the fragmented UK alternative network (altnet) market.
The new financing also includes a notable £800 million accordion facility targeting mergers and acquisitions. This strategic step will enable CityFibre to solidify its standing as a consolidator within the altnet sector, connecting millions more UK premises. The move aligns with the UK’s broader objectives of supporting economic growth through improved digital infrastructure.
CityFibre’s business model focuses on building and operating full-fiber networks, serving towns and cities underserved by traditional providers. These efforts position it as a viable alternative to the fibre and hybrid fiber-coaxial solutions offered by Openreach and Virgin Media. Through a wholesale model, CityFibre sells its services to internet service providers like Vodafone, TalkTalk, and ZenInternet.
The financial support comes from a robust group of shareholders, including Goldman Sachs Alternatives, Antin Infrastructure Partners, Mubadala Investment Company, and Interogo Holding. Greg Mesch, CEO of CityFibre, mentioned, “This 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 10Gb XGS-PON network, for the benefit of all our partners, their customers and for the UK economy.”
Backed by key investors, the financing will enable fast network expansion. This plan aligns with the company’s commitment to boost UK economic growth and digital infrastructure. Rachel Reeves, Chancellor of the Exchequer, commented on the significance of such investments for Britain, emphasizing how digital technology infrastructures are crucial for future economic resilience.
Meanwhile, Peter Kyle, Secretary of State for Technology, views the investment as evidence of how the telecoms industry is elevating the UK’s digital capabilities. He stated that this endeavor will ensure that high-speed internet reaches more homes and businesses, thereby enhancing quality of life and opening new growth opportunities.
