South Africa’s leading network operator,
Telkom is expected to complete the sale of its Swiftnet tower within the next
two months.
Chief Executive Officer of
Telkom, Serame Taukobong who revealed this in an interview with Moneyweb, said
they are in the process of selling the towers and expected to close the deal in
the next two months.
According to him, they are speeding
up their value-unlock journey at favourable pricing to shareholders.
“The Telkom board remains
confident that the company can unlock value, and we will continue on that
path,” he said. “For us, it is execution with speed and passion.”
As part of its value unlock strategy, Telkom planned to list its
towers and masts business Swiftnet on the JSE by the end of 2023.
However, this initial public offering (IPO) was delayed until
further notice because of unfavourable market conditions related to Russia’s
invasion of Ukraine.
The plan has changed. Taukobong said the Telkom board has
allowed him to pivot on their Swiftnet listing plans.
“We have been given support to sell the Swiftnet towers
outright. We are in the process of achieving that,” Taukobong said.
“Hopefully, in the next month or two, we will be able to
announce a successful sale to the market.”
The Telkom CEO said the process is quite advanced, and they have
two firm bidders for Telkom’s tower portfolio.
Part of the money from the Swiftnet sale will be used to
strengthen Telkom’s balance sheet. “It will be a big contributor to our
negative free cash flow,” he said.
“The cash income from the sale of the towers will help us to
recalibrate our balance sheet and put more investment in capex for our fibre
business.”
“Post that, we will look at whether we will consider a special
dividend. However, we are not thinking about that right now”.
In February, Bloomberg reported that New York-listed IHS Holding
was weighing a bid for Telkom’s tower unit.
Deliberations were focused on the structure of the potential
deal, although Telkom remained open to offers from other companies, and there
is no guarantee IHS will buy the unit.
According to a note from Nedbank, the Swiftnet business is worth
about R8.7 billion based on future expected cash flows.
