Telkom South Africa has announced its decision to sell its masts and towers business, currently operating under Swiftnet, for an enterprise value of ZAR 6.75 billion. This strategic move aligns with Telkom’s goal of optimizing its financial position and focusing on core operations by shedding non-core assets.
The acquisition will be led by Towerco Bidco Proprietary, a consortium led by Actis and joined by Royal Bafokeng Holdings (RBH), subject to approval from Telkom shareholders. Towerco Bidco plans to finance the acquisition through a combination of equity and third-party debt.
Swiftnet, Telkom’s subsidiary, is recognized for managing one of South Africa’s largest portfolios of masts and towers, boasting approximately 3,900 commercially viable structures.
Telkom intends to utilize the proceeds from the sale primarily to reduce its debt burden and make strategic investments in key areas, particularly in Openserve and Telkom Consumer. Openserve is a leading wholesale infrastructure connectivity provider, while Telkom Consumer is a significant player in fixed broadband services and converged communications.
The transaction, classified as a Category 1 transaction under JSE Listings Requirements, necessitates shareholder approval through an ordinary resolution. Telkom’s strategic decision aims to enhance its financial stability and focus on driving growth in its core business segments.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
25th March, 2024
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