Telkom, the South African telecommunications company, is set to hold a shareholder meeting on May 24th to vote on the possible disposal of its masts and towers business – Swiftnet.
This comes after a consortium led by UK-based investment firm Actis offered to buy Swiftnet for US$349 million.
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 the 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 board supports the sale, which recommends that shareholders vote in favour of the transaction.
