Israel’s Cellcom has announced that, together with the Israel Infrastructure Fund (IIF), it has entered into an investment transaction with HOT Telecommunication Systems related to Israel Broadband Company (IBC). In a press release regarding the matter, Cellcom revealed that the transaction comprises ‘several agreements’, the first of which centres on investment agreements struck between the partnership through which Cellcom and IIF hold 70% of IBC’s share capital. Under these investment agreements, HOT will become an equal partner in the IBC Partnership, and hold indirectly 23.3% of IBC’s share capital, ‘by making an investment substantially equal to the investment made by each of [Cellcom] and IIF until the closing date of the transaction’.
Alongside the investment agreements, Cellcom also confirmed the following: an indefeasible right of use (IRU) agreement, entered into between IBC and HOT, under which the latter undertakes to purchase an indefeasible right to use IBC’s fibre-optic network; and a services agreement, entered into between IBC and HOT, under which IBC undertakes to purchase certain services from HOT and may purchase additional services. IBC will also undertake to continue to purchase certain services supplied to it by Cellcom prior to the closing date of the transaction, while in addition to standard and customary conditions, Cellcom noted there exists ‘an undertaking to substantially increase the deployment of IBC’s fibre-optic network over the next few years’. Completion of transaction is subject to regulatory change and required approvals.