Telkom shares surge as R6.75bn sale of Swiftnet tower business nears completion

Telkom’s share price inched up 4.3% to R37.60 on Monday morning after the State-owned telecoms firm t announced that it has fulfilled the suspensive conditions to proceed to closing of the disposal of its mast and tower business, Swiftnet.

In March 2024, Telkom SA sold Swiftnet to a consortium that includes global infrastructure private equity investor Actis and Royal Bafokeng Holdings for R6.75 billion.

Telkom said the parties were accordingly proceeding to take the necessary steps to closing of the disposal in accordance with the sale agreement.

When the transaction was first announced, Actis said Swiftnet was a strategic acquisition for it and would see it acquire over 4 000 sites across the country. 

The platform is underpinned by a strong relationship with Telkom and other anchor tenants, and long-term contractual revenue.

Actis’ directors said the investment built on their aim to create a leading independent tower company, and Swiftnet would become part of its digital infrastructure portfolio in South Africa.

Actis invested in fibre network operator Octotel in 2020.

Meanwhile, Telkom said the disposal was in line with its value-unlock strategy, which had included the sale of non-core assets.

Telkom said the proceeds from the transaction would be used to pay down debt, strengthen its balance sheet and enable it to release cash for investment in its core businesses and deployment in pursuit of growth opportunities.

Tekom’s board had previously said that its market capitalisation did not represent its intrinsic value, and that all strategic options to unlock value would be explored.

There were also ambitious growth plans for Telkom Consumer - South Africa's largest fixed broadband provider measured by network deployed, an internet service provider and, together with its mobile network, a converged communications provider, the company said.

Actis had over the last two decades deployed $1.4bn in investments in South Africa. Royal Bafokeng Holdings is a long-term investor that acquires significant stakes in high growth, defensive sectors and high-quality companies with established track-records.

BUSINESS REPORT