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Telkom Set to Announce Sale of Swiftnet Tower and Masts in April

By Oluchukwu Ikemefuna

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One of the biggest telcos in South Africa, Telkom, plans to divest its mast and tower division, Swiftnet. Telkom made this announcement on Tuesday.


The company also stated that a group of equity investors, led and managed by a respectable private equity firm, and comprising a partner in Black Economic Empowerment, is the preferred bidder. 

Telkom Statement On Swiftnet Tower Sales

In a statement released on November 21, 2023, Telkom’s CEO, Serame Taukobong, stated, “Shareholders are hereby advised that Telkom is currently in exclusive negotiations with a preferred bidder regarding the potential disposal of Swiftnet.”

“A consortium of equity investors, led and managed by a reputable private equity firm, including a partner focused on black economic empowerment, is the preferred bidder.”

Telkom’s balance sheet will be strengthened with a portion of the proceeds from the sale of Swiftnet. He went on, “It will be a big contributor to our negative free cash flow.”

“We will be able to realign our balance sheet and increase our capital expenditure for our fiber business with the help of the cash income from the tower sales.”

“After that, we’ll examine whether to give special dividends some thought. Still, that is not something we are currently considering.”

When updating this cautionary announcement in compliance with the JSE Listings Requirements, Telkom hopes to be able to provide a more thorough announcement, the CEO of Telkom stated.

How This Sales Might Benefit Telkom in its Growth and Development 

Unless the JSE permits otherwise, a company must provide a progress report at least every 30 business days following the issuance of a cautionary notice in order to meet the listing requirements of the JSE.

March and the first part of April have three public holidays: Human Rights Day on March 21st, Good Friday on March 29th, and Family Day on April 1st.

Consequently, April 4, 2024, is 30 business days from February 19, 2024.

Telkom, which separated into a distinct entity after spinning off its telecom towers and masts, has been looking into ways to increase the value of the company, which it believes is undervalued due to its group structure.

Swiftnet Towers

Consolidating core assets is a key strategy for driving strategic growth for the government-owned operator, which is reorganizing itself as an infrastructure company at the same time.

According to Telkom, this process should be completed by the end of 2025.

Probability in the Towers Sales

The transaction is still pending approval from Telkom shareholders and the relevant regulatory bodies because it does not meet the JSE Limited Listings Requirements’ Category 1 requirements. 

According to a previous note from Nedbank Group Ltd., Swiftnet’s estimated value was 8.7 billion rands ($475 million) based on future expected cash flows. 

Additionally, if the deal proceeds, shareholder and regulatory approval in South Africa would be required. Telkom stated that there is no assurance that the talks will result in a deal. There will be an update on how this goes in April. 

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Abdullahi Kafayat
Abdullahi Kafayat

Abdullahi Kafayat is an enthusiastic writer interested in the tech world. She's a graduate of Obafemi Awolowo University and has a BSc in Chemistry. You can reach her at Kafayatabdullahi17@gmail.com.

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