Telkom has finalized a sale agreement with an acquisition vehicle led by a consortium, including Actis and RBH, for the potential disposal of its masts and towers business, Swiftnet. This move is aligned with Telkom’s strategy to unlock value and strengthen its balance sheet.
Key Highlights:
- Telkom’s strategic decision aims to unlock value by disposing of non-core assets, such as Swiftnet.
- The sale consideration amounts to an enterprise value of R6.75 billion.
- Proceeds from the sale will primarily be used to reduce Telkom’s debt, enhancing its financial position.
- The Disposal, subject to Telkom Shareholders’ approval, represents a Category 1 transaction as per JSE Listings Requirements.
Background and Rationale:
Telkom’s Board emphasizes the importance of unlocking the company’s intrinsic value. The sale of Swiftnet aligns with this strategy, allowing Telkom to focus on its core businesses, particularly Openserve and Telkom Consumer. The reduction of debt will enable Telkom to invest in growth opportunities and strengthen its position in the market.
About the Purchaser:
Towerco Bidco Proprietary Limited, the acquiring entity, is backed by Actis, a global investor in sustainable infrastructure, and RBH, an African community investment holding company. Actis brings extensive experience in digital infrastructure investments, aligning with Telkom’s strategic goals.
Transaction Details:
The sale agreement involves the transfer of all issued shares of Swiftnet to the Purchaser. The purchase consideration, subject to adjustments, amounts to an enterprise value of R6.75 billion. Telkom’s shareholder loan to Swiftnet will be partially repaid as part of the transaction.
Suspensive Conditions and Termination:
The Disposal is subject to various suspensive conditions, including regulatory approvals and Telkom Shareholders’ resolution. If not satisfied within the specified timeframe, the sale agreement will terminate automatically.
Use of Proceeds:
Telkom intends to utilize the proceeds from the Disposal to reduce debt and strengthen its balance sheet. This strategic move will enable Telkom to allocate resources to its core businesses and pursue growth opportunities.
The sale agreement signifies Telkom’s commitment to enhancing shareholder value and optimizing its business portfolio. With Actis and RBH as strategic partners, Telkom aims to navigate the evolving telecommunications landscape effectively.
