Santiago, October 22, 2022
ESSENTIAL FACT
Identification of the issuer
Empresa Nacional de Telecomunicaciones S.A.
Open Joint Stock Company
R.U.T. 92.580.000-7
Address: Avda. Costanera Sur N° 2760 Piso 22, Parque Titanium, Torre C, Las Condes, Santiago.
Registered in the Securities Registry with N° 0162.
This communication is made pursuant to the provisions of Articles 9 and 10 of Law No. 18,045 and is an essential fact with respect to the company, its businesses, its public offering securities or the offer thereof.
SANTIAGO, October 22, 2022
N° 12-2022 /
Mrs.
Solange Berstein Jáuregui
President
Financial Market Commission
PRESENT REF.: Communicates essential facts or relevant information
Madam President:
I refer to the communication as an essential fact dated March 15, 2022, by means of which Empresa Nacional de Telecomunicaciones S.A. (“ENTEL”) reported that it had commissioned the investment bank BNP Paribas the process to receive expressions of interest from third parties in relation to a new strategy regarding its fiber optic infrastructure, of ENTEL’s current domain and that at that date expressions of interest had been received from third parties, which were being analyzed, which could eventually lead to a process that implied the total or partial disposal of said assets, as well as the provision of services between the parties, together with other possible commercial agreements; and the communication as an essential fact sent yesterday, through which it was informed, among others, that ENTEL was negotiating a possible transaction with a fiber infrastructure operator of recognized prestige (hereinafter the “Operator”) and in particular, the sale in favor of the Operator of substantially all the assets that make up the fiber optic infrastructure business line to provide Internet services to ENTEL’s Home. in Chile, as well as an agreement for the provision of connectivity services to continue offering Internet services to the Home over the Operator’s network, together with other complementary contracts to these (a “Possible Transaction”).
Updating the information provided through the essential facts identified above, ENTEL hereby informs that, on October 21, 2022, it has signed with InfraCo SpA (company of the construction, operation and marketing of fiber network infrastructure for the provision of wholesale telecommunications services, which operates under the fantasy name “OnNet Fibra”, 60% controlled by KKR Alameda Aggregator Partners L.P., a company whose indirect control is in KKR 4 Co. Inc., and where Telefónica Chile S.A. owns the remaining 40% of the property, hereinafter “KKR — OnNet”) a framework asset purchase agreement under which it was agreed to dispose in favor of said consortium substantially all the assets that make up the business line of fiber optic infrastructure for Internet services to the ENTEL’s home in Chile (the “Framework Agreement for the Sale of Assets”) which includes approximately 1.2 million past fiber optic real estate units, which in turn includes an agreement for the signing of a contract for the provision of connectivity services to continue offering Internet services to the Home over the KKR – OnNet network (“Framework Agreement for Fiber Optic Connectivity Services”) with a joint coverage of approximately 3.9 million past fiber optic real estate units, once the Transaction is approved and certain operational integrations have been made, and 4.3 million by 2024, as well as other ancillary contracts such as an O&M Agreement, a Housing Contract, a Support Agreement, a Pipeline and Camera Contract and a Transition Services Agreement (TSA), hereinafter the operation and individualized contracts, the “Transaction”.
The total amount of the Transaction will amount to a total of UF 10.03 million, equivalent to approximately US$ 358 million. This total amount of the Transaction comprises the total payment of the price agreed in the Master Asset Purchase Agreement and the corresponding payments for the Framework Agreement for Fiber Optic Connectivity Services. The Transaction is subject to closing conditions, obligations to do and not to do, declarations and guarantees and indemnity obligations customary for this type of operations and in particular, to the approval of the concentration operation that entails the Transaction by the National Economic Prosecutor’s Office (“FNE”).
Likewise, it is noted that after the signing of the Framework Agreement for the Sale of Assets, once the approval of the FNE has been obtained, partial closures will be verified and the Framework Contract for Fiber Optic Connectivity Services will be signed in the first of them under the terms and conditions already agreed and, in the following closings, the other documents on the basis of which the Transaction is structured. These closures are subject to compliance with certain usual suspensive conditions for this type of operation, including the authorization already indicated by the FNE, which is estimated to occur within the first half of 2023. At each partial closing, payments of a percentage of the total amount of the Transaction will accrue.
With regard to the development of the fiber-to-the-home strategy in Peru, the Company will continue to analyze the different alternatives for the better development of the Company’s fiber-to-the-home business in that country.
Finally, it is reported that at this stage it is not possible to estimate the expected impact of the Transaction on the Company’s consolidated income.
ENTEL will keep the Market and the Financial Market Commission informed of any progress that may be communicated in this regard.
Without further ado, he greets you very sincerely,
ANTONIO BÚCHI BUC
General Manager
c.c.: Mr. Superintendent of Pensions
Santiago Stock Exchange, Santiago Stock Exchange
Bolsa Electrónica de Chile, Chilean Stock Exchange
Messrs. Directors
Link to file in CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=7682825d6f3b94cc4e3d9724bb3fcc04VFdwQmVVMXFSWGROUkZGM1RrUmpORTFSUFQwPQ==&secuencia=-1&t=1682376108
