TNG, a leading integrated German FTTH platform headquartered in Kiel, has signed an agreement to raise €325m with an international banking consortium, to refinance the existing bank facilities and secure new capital in order to accelerate the expansion of its fibre network. The financing package allows TNG to raise additional €150m of debt within the existing facilities agreement.
TNG focuses on rolling out and operating fibre to the home networks (FTTH) in underserved rural and semi-rural areas. It has already successfully provided FTTH connections to more than 60k homes in Northern Germany and Hesse.
With the support of ICG Infra, its majority shareholder, TNG plans to provide FTTH to more than 500k homes within the next four years and has already secured turnkey contractor capacities to deliver the largest part of this plan.
The financing consortium is led by KfW and Nord LB as mandated lead arrangers, and also comprises Hamburg Commercial Bank, Kommunalkredit, NIBC and ING. The facility’s agreement enables TNG to incorporate ESG commitments which when met, would reduce the cost of borrowing for TNG.
Helmut Gertz, CFO of TNG commented:
We are delighted to have been able to secure long-term financing to support the development of our fast-growing network. As we continue our growth plan, we are confident that we have all the resources required to become one of the key fibre operators in rural and semi-rural areas in Germany.
Frank Heiss, Managing Director and head of DACH at ICG Infra, commented:
We are very happy to further support the growth plan of the company and enable broadband connection throughout Germany. This successful financing demonstrates the robustness and attractivity of the sector.
TNG was advised by Macquarie Capital (finance), Deloitte (financial DD), Rautenberg (commercial DD) and Freshfields (legal documentation), Hogan Lovells (legal DD and bank counsel) and Kerius (hedging).
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Created in 1997, TNG has grown to a strong regional FTTH platform in the North of Germany with more than 90,000 contracted private and business customers.
TNG has established a strong position in the Northern German telecommunication market as the leading, independent city carrier in Kiel. In 2013, the Company entered the rural FTTH market and has expanded its network footprint on both own and leased networks significantly since then.
TNG has developed a strong FTTH track record on the back of a highly vertically integrated business model, including own fibre planning and construction activities, and provides customers with fast and reliable fibre connectivity solutions and telecommunication services.
ICG provides flexible capital solutions to help companies develop and grow. We are a global alternative asset manager with over 30 years’ history, managing $68.5bn of assets and investing across the capital structure. We operate across four asset classes: Structured and Private Equity, Private Debt, Real Assets, and Credit.
We develop long-term relationships with our business partners to deliver value for shareholders, clients, and employees, and use our position of influence to benefit the environment and society. We are committed to being a net zero asset manager across our operations and relevant investments by 2040.
About ICG Infra
In 2018, ICG launched a new European Infrastructure Investment team dedicated to investing in core and core-plus infrastructure. ICG Infra is following a green generalist strategy, with an integrated ESG approach and has already closed 8 transactions including 2 in the digital space (Océinde Communications, leading player in fibre in Reunion Island and TNG, FTTH operator in Germany), 2 in the energy transition (OSB, n°3 player in the French sub-metering market and Zeplug, EVCS for collective parking lots) and 4 in the renewables space (Akuo and CVE in France, BSR in UK and Dos Grados in Iberia)
These investments are a perfect illustration of ICG’s investment strategy in the infrastructure segment: a focus on the mid-market, with a flexible approach in terms of capital structuring (equity / quasi equity) and a desire to forge long-term partnerships with management teams led by a strong entrepreneurial growth project.