Telkom, South Africa's third largest mobile operator, has sold its tower business, Swiftnet, to Towerco Bidco Proprietary Limited for $343 million (R6.5 billion).
The telecoms company announced the sale of Swiftnet, which has a large mast and tower infrastructure, over 4000 installations, and leases co-location space to major mobile network providers.
Telkom has been seeking to sell the towers for nearly three years, as the Johannesburg Stock Exchange-listed company seeks to maximise shareholder value.
The company's plan to unbundle Swiftnet was first announced in September 2021, when then-CEO Sipho Maseko stated that the unit's value was not accurately reflected in the company's shares.
Telkom notified shareholders today that it has finally reached an agreement with Towerco Bidco, a newly formed entity comprised of a consortium of equity investors led and managed by Actis, which owns 70% of the purchaser's shares, with Royal Bafokeng Holdings holding the remaining 30%.
"This move underscores Telkom's commitment to fortifying its financial position, reducing debt, and enhancing liquidity," the firm said in a statement.
Serame Taukobong, Telkom Group CEO, commented: “This decision marks a pivotal moment in Telkom's journey towards unlocking shareholder value and streamlining our focus on core business operations. This divestiture aligns perfectly with our strategy to concentrate on our infrastructure assets while realising the inherent value in non-core holdings."
He added: "Beyond the financial implications, this transaction ensures seamless continuity for our related businesses, particularly Telkom Consumer and Openserve, by guaranteeing continued access to Swiftnet's infrastructure under mutually beneficial terms."
David Cooke, managing partner at Actis, sees long-term value in the Swiftnet prospect and is pleased to continue working with the telephony group, providing access services to Telkom Consumer and Openserve.
The purchase is still subject to shareholder and regulatory clearances, but Telkom expressed optimism about its potential benefits for all parties.
"We believe this strategic move will create long-term value for Telkom and its shareholders, cementing our position as a leader in South Africa's evolving digital landscape," Taukobong concluded.
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