UPDATE Shareholders in South African communications service provider Telkom, headquartered in Centurion, SA, will soon vote on a plan to sell the group’s towers and masts to a consortium led by private equity firm Actis.
Telkom confirmed in March the sale of its tower unit Swiftnet for $353 million to infrastructure-focused private equity firm Actis. The sale-and-leaseback arrangement is intended to help Telkom pay down debts and balance its books, according to Developing Telecoms.
The deal is not final, however. Telkom has now distributed to its shareholders a circular related to the disposal of the assets. The circular includes a notice convening a general meeting on May 24, at which shareholders will be asked to decide on the proposed sale.
If this decision goes as expected, Telkom will join competing mobile network operators, MTN South Africa and Cell C, in selling tower infrastructure assets in order to focus on core business operations, leaving only Vodacom among the major mobile operators still owning its towers.
Swiftnet owns about 4,000 towers around South Africa. The Actis-led consortium will finance the Swiftnet purchase with both equity and third-party debt. More than shareholders, the acquisition must still get approval from regulators.
As with these types of deals, Telkom can now lease towers without actually having to maintain them. Telkom Group CEO Serame Taukobong comments, “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.”
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