Rogers Communications Secures CDN$7 Billion in New Equity

Rogers Communications Announces Major Equity Investment

The recent agreement by Rogers Communications Inc. for a CDN$7 billion equity investment marks a significant step in its financial strategy. The funds are intended to enhance the company's balance sheet, primarily through debt repayment, thereby improving financial stability.

Strategic Partnership with Blackstone

Under the definitive agreement, Rogers has partnered with Blackstone and several prominent Canadian institutional investors. Blackstone will acquire a non-controlling interest in a newly established Canadian subsidiary of Rogers, which will own part of the wireless network. Despite this arrangement, Rogers retains complete operational control, allowing for consistent oversight over their wireless operations.

"This strategic partnership reflects the trust that investors place in Rogers and our robust assets," stated Tony Staffieri, President and CEO of Rogers. The investment not only emphasizes the growth potential of the company but also signifies Rogers’ commitment to reducing its debt levels.

Financial Impact and Debt Management

Rogers plans to employ the net proceeds from this investment to reduce its overall debt. According to Glenn Brandt, the Chief Financial Officer, the transaction will bolster the company’s investment-grade balance sheet. It is anticipated that this move will lead to a reduction in total borrowings, unlocking hidden value within critical assets.

Furthermore, Rogers has successfully issued an aggregate of $9 billion of equity-valued capital since the end of the previous financial year. This issuance is expected to reduce the company's leverage by nearly 1 turn, positioning Rogers firmly within the market.

Details of the Equity Investment Structure

In terms of ownership, Blackstone will maintain a 49.9% equity interest in the subsidiary with a 20% voting interest, while Rogers will hold 50.1% equity and 80% voting rights. This structure not only safeguards Rogers’ operational dominance but also permits the company to buy back Blackstone's stake at specified future dates.

Projected Returns and Future Expectations

The subsidiary is projected to distribute around CDN$0.4 billion annually to Blackstone in the initial five years following the transaction closing. Rogers anticipates an average capital cost of 7% per annum, which aligns well with the financing strategy outlined in their long-term growth plan.

Future Outlook and Closing Conditions

The transaction's completion is subject to specific closing conditions; it is expected to close in the second quarter of 2025. Additionally, Rogers may seek consent from the holders of its outstanding senior notes to execute some proposed clarifying amendments.

Company Overview and Investor Information

Rogers Communications Inc. is recognized as Canada’s leading communications and entertainment company. The company is publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and the New York Stock Exchange (NYSE: RCI). With a focus on innovation and customer satisfaction, Rogers continues to lead in the telecommunications industry.

For further inquiries, investors can reach out to Rogers Investor Relations at investor.relations@rci.rogers.com or by phone at 1-844-801-4792.

Media inquiries can be directed to media@rci.rogers.com or 1-844-226-1338.

Frequently Asked Questions

What was the purpose of the CDN$7 billion investment?

The investment is intended primarily for debt repayment to strengthen Rogers' balance sheet.

Who are the investors involved in this agreement?

The investor group is led by Blackstone and includes major Canadian institutional investors such as CPP Investments and PSP Investments.

What interest does Blackstone have in Rogers?

Blackstone will hold a 49.9% equity interest in a new subsidiary of Rogers, with a 20% voting interest.

How will this investment affect Rogers’ debt leverage?

This investment is expected to reduce Rogers' debt leverage ratio by nearly 1 turn, improving its financial health.

When is the transaction expected to close?

The closing of the transaction is anticipated in the second quarter of 2025, pending the fulfillment of closing conditions.

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