Telkom’s R6.75-billion tower sale progress

Telkom has announced that shareholders will meet on 24 May to vote on whether the company will dispose of its masts and towers business, Swiftnet.

It has also provided shareholders with a 130-page circular detailing the deal.

This comes after a consortium led by UK-based investment firm Actis offered to buy Swiftnet for R6.75 billion.

Telkom said Swiftnet has around 4,000 sites nationwide and leases co-location space to major mobile network operators.

“Telkom’s market capitalisation does not represent its intrinsic value,” the company said in the circular.

For this reason, the Telkom board decided to explore all strategic options to unlock value.

“The disposal is in line with such value-unlock strategy and involves the disposal of a non-core asset, allowing Telkom to reduce debt from the disposal proceeds.”

Additionally, Telkom said it has ambitious growth plans across its business units, particularly for its wholesale and infrastructure division Openserve and Telkom Consumer.

“The reduction of Telkom debt through application of the disposal proceeds will strengthen [our] balance sheet and enable [us] to release free cash flow for investment in […] core businesses and deployment in pursuit of growth opportunities.”

Telkom said the sale has the support of the board, which recommends that shareholders vote in favour of the transaction.

Some of the key dates Telkom highlighted in its announcement were:

• Tuesday, 14 May 2024 — Last day to trade in shares to be eligible to participate and speak in and vote at the general meeting
• Wednesday, 22 May 2024 — Proxies must be delivered by 10:00
• Friday, 24 May 2024 — General Meeting of Shareholders to be held electronically and in person at 10:00