Telkom postpones listing cellular towers business on the JSE
Telkom informed shareholders on Wednesday that it has postponed the separate listing of its masts and towers business, which was scheduled to happen before 31 March 2022.
“Given the recent global events, current market conditions and the impact on the capital markets, the board has resolved to postpone the separate listing of Swiftnet on the [Johannesburg Stock Exchange],” Telkom stated.
“The board remains committed to its value unlock strategy, which is premised on Telkom’s market capitalisation not representing its intrinsic value,” it continued.
“Against this backdrop, the board continues to consider all strategic options that support its value unlock strategy, which include affirming the valuation of Swiftnet and its contribution to the valuation of Telkom.”
Swiftnet is a Telkom subsidiary under management by Gyro.
Telkom first announced its plans to list Swiftnet in September last year.
In November, Telkom assured shareholders that it had made significant progress with its plan to list its masts and towers business.
With 6,225 masts and towers, Telkom said it is South Africa’s largest independently run tower portfolio.
Graeme Körner from Körner Perspective previously said that Telkom’s separate listing of Swiftnet may not have the intended effect.
While Telkom has a few valuable assets, Körner said you can’t asset-strip the business if you do not believe in the company’s core.
“There is also no guarantee that the asset value is going to be unlocked,” he said.
However, Körner said the idea of breaking up Telkom into pieces and allowing separate management teams to focus on the different business units makes sense.
“My sense is that the sum of the parts is worth a fair amount more than the current share price,” he said.
Körner warned that even if this strategy is implemented, you are still going to inherit a mobile unit that struggles to compete against Vodacom and MTN, and a dying fixed-line business.
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