Vumatel owner raises R3.72 billion
Remgro announced that it is participating in a rights offer being undertaken by Community Investment Ventures Holdings Proprietary Limited (CIVH), which successfully raised R3.72 billion in equity.
Before the transaction, Remgro held a 55.2% stake in CIVH.
CIVH, in turn, owns the fibre network operators Vumatel and Dark Fibre Africa (DFA). It acquired 100% of Vumatel in May 2019.
The transaction involved Remgro’s wholly-owned subsidiary Industrial Electronic Investments (IEI), which carries on business as an investment holding company in respect of Remgro’s interests in CIVH.
After the transaction, IEI’s shareholding in CIVH will increase to 55.5%.
Remgro stated that it would use the capital it raised in the rights offer to repay all its debt at the holding company level, which it incurred in support of the acquisition of Vumatel.
According to Remgro, this equity capital injection will strengthen CIVH’s capital structure and let it retain the flexibility to capitalise on future opportunities.
It said that it sees significant opportunities ahead for further growth in both of CIVH’s largest operating subsidiaries.
The extension of Active Ethernet, Gigabit Passive Optic Network, and Reach expands to new regions for Vumatel, and the flexibility of the business model continues to see strong growth in long-term contracts and annuity income in DFA, said Remgro.
Despite the difficulties of Covid-19, Remgro reported that CIVH’s revenue grew by more than 25%. At the same time, the group remained cash generative and invested more than R3.5 billion during the prior fiscal year into expanding its operations and network.
“Following the rights issue, CIVH is well funded and positioned for its next phase of growth,” said Remgro’s Pieter Uys.
“This further allocation of capital reaffirms our support for the CIVH team, market position and broader investment into developing the South African broadband telecommunications infrastructure, enabling jobs and access to the economy’”.
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