Telus seeks to raise up to $1.5b to fund 5G, broadband infrastructure

Offering comes shortly after Rogers announced it was acquiring Shaw

Photo: Rob Kruyt, BIV

Telus Corp. (TSX:T) has its eyes on some extra cash — as much as $1.5 billion — as it looks to build out its 5G and broadband infrastructure across Canada.

The Vancouver-based telecom giant said Thursday it would sell just over 51 million shares priced at $25.35 each in a bid to raise $1.3 billion.

The deal sees Telus tapping RBC Capital Markets, CIBC Capital Markets, BMO Capital Markets, Scotiabank and TD Securities Inc. as underwriters that would then sell those purchased shares to the public.

The underwriters have the option of purchasing nearly 7.7 million additional shares priced at $25.35 each, bringing Telus’ total raise to $1.5 billion.

The company said it intends to use the fresh capital to strengthen its balance sheet and invest in broadband infrastructure in B.C., Alberta and eastern Quebec as well as ramp up deployment of its 5G network.

Anywhere from $500 million to $700 million is expected to be spent this year, while $750 million to $1 billion would be carried over into 2022.

Telus said it expects to close the offering on or about March 31.

The effort to raise more cash comes just over a week after rivals Rogers Communications Inc. (TSX:RCI) and Shaw Communications Inc. (TSX:SJR) announced plans to merge.

Rogers’ acquisition of Shaw would see Telus overtaken as the nation’s second-largest telecom provider based on market capitalization, and comes at a time telecom companies are ramping up 5G deployment.

Rogers said it would commit $2.5 billion to expanding its 5G network in Western Canada.

Telus’ initial 5G rollout in June 2020 trailed Rogers by five months and Bell by one week.

Telus had long been aligned with Huawei on its 5G ambitions, but Telus and Bell eventually left the Chinese company in the dust last June when they announced they were tapping European vendors Telefonaktiebolaget LM Ericsson (Nasdaq:ERIC) and Nokia Corp. (HEL:NOKIA) to build out their 5G networks.

Telus is also tapping Samsung Electronics Co. Ltd. to help deploy its 5G products.

Telecom analyst Mark Goldberg told BIV earlier this month the merger would allow Rogers to accelerate its 5G deployment in Western Canada.

“5G deployment is aided by having fibre backhaul from the towers. Telus already has extensive fibre facilities in Western Canada and a network agreement with Bell to help both companies with their network deployment in each other's territory,” said Goldberg, principal of Mark H. Goldberg & Associates Inc.

“I don't see the proposed transaction impacting the conditions for Telus and Bell to expand their relationship.”