The sale of Telkom’s mast and tower division, called Swiftnet, to a group led by Actis and Royal Bafokeng Holdings has been finalised. This calculated action signifies a dramatic change in Telkom’s financial and operational priorities.
Actis owns a dominant 70 percent of Towerco Bidco Proprietary Limited in this consortium, with Royal Bafokeng Holdings keeping the remaining 30 percent.
The transaction was announced following Telkom’s notification to its shareholders on Monday morning that all suspensive conditions associated with the R6.75 billion sale had been successfully fulfilled.
Last year, the Independent Communications Authority of South Africa (ICASA) and the Competition Tribunal both gave their approval to the deal.
Nevertheless, the competition watchdog’s approval was subject to some undisclosed requirements that were thought to be essential for the deal to progress.
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Deal proceeds to pay off debt
Telkom has stated that it will use a portion of the sale’s proceeds to improve its overall balance sheet and pay down its current debt.
“The completion of the Swiftnet sale marks an important milestone for Telkom,” stated Serame Taukobong, the Group CEO of Telkom.
He underlined that this deal will strengthen the company’s position as South Africa’s digital backbone by allowing it to investigate growth prospects consistent with its data-led growth strategy.
Swiftnet, which has a portfolio of about 4,000 masts and towers, is being sold as part of Telkom’s larger plan to focus on its core business.
Taukobong remarked, “This transaction is a pivotal moment in Telkom’s implementation of our data-led strategy under OneTelkom.”
Funding of net-generation technology infrastructure
He added that in addition to strengthening the company’s balance sheet and lowering debt, the sale will generate extra funds that can be used to fund the infrastructure of next-generation technology.
To support its data-driven growth goals, Telkom keeps moving forward with the alignment of its asset portfolio and the sale of non-core properties. Following its withdrawal from its investment in Octotel, a fibre network operator, Actis acquired SwiftNet.
In 2020, Actis paid R2.3 billion to acquire a majority stake in Octotel. Another big shift in the telecom industry occurred in March when a group led by African Infrastructure Investment Managers declared that it had agreed to buy Octotel from Actis for an undisclosed sum.