American Tower AMT has successfully concluded the sale of all equity interests in its operations in India, referred to as “ATC India” to Data Infrastructure Trust (“DIT”). This Infrastructure Investment Trust is sponsored by an affiliate of Brookfield Asset Management.
AMT’s Transaction Details
The transaction yields total cash proceeds for American Tower of approximately INR 210 billion, or $2.5 billion, based on the exchange rates on Sept. 12, 2024.
This total cash proceeds includes nearly $320 million related to the monetization of optionally converted debentures issued by Vodafone Idea, as well as payments related to ATC India receivables, net of withholding tax. Additionally, around $2.2 billion will be received as final proceeds at the closing of the transaction.
It is expected that these proceeds will be utilized towards the repayment of American Tower's existing indebtedness, including the repayment of the existing term loan in India at the time of closing. No additional proceeds from this transaction are expected.
2024 Outlook Changes for AMT
As a result of the sale, ATC India’s results will now be reported as discontinued operations. Taking into account the contributions from discontinued operations and adjustments for the completion of the transaction, AMT projects that the present outlook midpoints for property revenue and Adjusted EBITDA of $10.83 billion and $7.185 billion, respectively. Furthermore, the AFFO attributable to AMT shareholders per diluted share, which will include contributions from discontinued operations, is anticipated to be $10.48 per share.
The company projects that the property revenue, Adjusted EBITDA from continuing operations and AFFO attributable to AMT common stockholders per share from continuing operations proforma, when adjusted for interest expense savings derived from the utilization of proceeds from the ATC India sale, would amount to $9.92 billion, $6.805 billion and $9.95, respectively, based on annualized effects of these proceeds and the related interest expense savings.
Wrapping Up
The sale of India operations enables the company to explore new investment opportunities and provides financial flexibility in the United States & Canada, Asia-Pacific, Africa, Europe and Latin America. Hence, with such portfolio restructuring moves, American Tower seems well-poised to prosper alongside strengthening its capital position.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have rallied 19% compared with the industry’s growth of 15.9%.
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Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Cousins Properties CUZ and Lamar Advertising LAMR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share has moved marginally northward over the past two months to $2.66.
The Zacks Consensus Estimate for Lamar Advertising’s current-year FFO per share has been raised marginally over the past two months to $8.09.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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