Telkom South Africa has announced plans to sell its masts and towers business housed in Swiftnet for an enterprise value of ZAR 6.75 billion. Telkom said the move is part of its strategy to unlock value and strengthen its balance sheet by divesting non-core assets. The sale agreement, signed with Towerco Bidco Proprietary, a consortium led by Actis and including the African community investment holding company Royal Bafokeng Holdings (RBH), is subject to Telkom shareholder approval. Towerco Bidco will fund the purchase consideration through a combination of equity and third-party debt.
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"The purchaser is Towerco Bidco Proprietary, an entity incorporated by the Consortium for the purpose of the acquisition and comprising an infrastructure fund managed by Actis, which will hold the majority of the issued shares of the Purchaser; and RBH, which will hold no less than 30 percent of the issued shares," Telkom said.
Telkom's Swiftnet
Swiftnet, Telkom's subsidiary, reportedly operates one of the largest portfolios of masts and towers in South Africa, with approximately 3,900 commercially viable structures.
Telkom intends to utilise the proceeds from the sale primarily to reduce its debt and invest in its core businesses, particularly Openserve (wholesale infrastructure connectivity provider with the largest open-access network across South Africa) and Telkom Consumer (fixed broadband provider and, together with its mobile network, a converged communications provider).
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Transaction
The transaction, categorised as a Category 1 transaction under JSE Listings Requirements, requires shareholder approval through an ordinary resolution. With this move, Telkom aims to enhance its financial position and focus on growth opportunities in its core business areas.
