OTPP closes in on Leighton's telecom assets

The sale - which includes Nextgen Networks, Metronode and Infoplex - values Leighton's entire telecom portfolio at A$885 million. The deal is subject to final negotiations, due diligence and closing conditions such as the consent of various counter-parties.

Leighton appointed Macquarie to sell the non-core assets in September in order to pay down debt. The company has $295 million of debt maturing in July 2014.

OTTP was first reported to be in the running for the assets last month. KKR, Providence Equity Partners and TPG Telecom had also been in the bidding for NextGen.

"A key element of our strategy is the recycling of capital, such as our telecommunications infrastructure assets, which are considered non-core. The proposed sale follows the completion of a detailed strategic review of those assets," Hamish Tyrwhitt, CEO at Leighton Holdings, said in a statement. "We have worked through an extensive sale process which elicited a range of interested parties."

The transaction is being led by OTPP's long-term equities group, which focuses on direct investments with steady cash flow and growth potential over a long-term horizon.

Among the North American pension funds, OTTP has been one of the most active direct investors in Asia. Last year it teamed up with Hastings Fund Management to acquire a 50-year lease on Sydney Desalination Plant for $2.35 billion and then bought a 9.9% stake in Korea's Kyobo Life Insurance for $398 million.

The pension fund is also in the process of opening a Hong Kong office this year as part of efforts to diversify its investments in the region.

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