ZURICH, May 24 (Reuters) - Sunrise Communications plans to boost its 2017 dividend after agreeing to sell 2,239 telecom towers for 500 million Swiss francs ($512 million) to a consortium led by Cellnex, the Swiss company said on Wednesday.
Sunrise now plans to pay a 2017 dividend of between 3.90 francs per share and 4.10 francs per share, up from the previously planned payment of 3.45-3.55 francs.
The shares were seen rising 2 percent, according to premarket indicators.
Sunrise will use 450 million francs from the towers sale to cut debt, it said, with the aim of quickly achieving an investment grade credit rating.
The remainder will go toward upgrades to its network, fibre partnerships and Sunrise shops, as well as transaction costs.
“The new partnership will enable us to focus even stronger on the key differentiating elements of our active network infrastructure,” Chief Executive Olaf Swantee said in a statement.
Sunrise said its stronger financial position following the sale allowed it to upgrade its dividend policy, where it now aims to pay out at least 65 percent of equity free cash flow, rising to 85 percent when its leverage meets future milestones.
With the tower acquisition, Barcelona-based Cellnex now has 23,000 sites across Spain, Italy, France, Netherlands, Britain and Switzerland, it said.
Other members of the consortium included Swiss Life and Deutsche Telekom.
While Sunrise left its 2017 revenue guidance at 1.82 billion to 1.86 billion francs, it trimmed its target for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to 577-592 million francs, down from 595-610 million.
Sunrise also lifted full-year capital spending plans for 2017 to 255-295 million francs from 225-265 million francs.
$1 = 0.9766 Swiss francs Reporting by John Miller; Editing by Mark Potter