Johann Rupert’s Remgro preparing for a fight

Johann Rupert’s Remgro remains committed to completing its deal with Vodacom despite the regulatory hurdles it has faced so far.

This deal centres around Community Investment Ventures Holdings (CIVH), one of Remgro’s key investments. The company is active in the telecommunications and information technology sectors.

CIVH’s operating companies, which are housed under Maziv, are Dark Fibre Africa (DFA) and Vumatel. They construct and own fibre-optic networks.

Following an internal restructuring at Remgro in 2023, DFA and Vumatel were placed under Maziv, a newly formed wholly-owned subsidiary of CIVH, majority-owned by Remgro.

Vodacom and CIVH entered into transaction agreements, under which Vodacom planned to acquire up to 40% of Maziv through assets of R4.2 billion and cash of at least R6 billion.

As part of this deal, Vodacom’s entrance as a shareholder will dilute Remgro’s indirect interest in DFA and Vumatel. However, Remgro will also obtain an indirect interest in the assets contributed by Vodacom. 

In October 2024, the Competition Tribunal prohibited the proposed transaction but has yet to provide detailed reasons for its decision.

Vodacom and Remgro have lodged a notice of appeal with the Competition Appeal Court that will be supplemented upon receipt of the Tribunal’s reasons for the prohibition. The Competition Appeal Court dates are 22 to 24 July 2025. 

In Remgro’s interim results for the six months ended 31 December 2024, the company said it and CIVH remain committed to the proposed transaction.

The companies believe that if the Competition Appeal Court permits the transaction, it will benefit South African consumers and the broader economy significantly. 

“These include the very real and tangible positive social impacts relating to critical issues such as the democratisation of the internet in lower-income areas, greater access to cheaper fibre to the broader South Africa, as well as the potential for job creation, and ultimately growth of the economy,” the company said.

Since its announcement, Remgro has communicated this transaction’s ‘selling point’ as the digital access it offers to lower-income areas.

“South Africa desperately needs additional significant investment, especially in digital infrastructure in lower-income areas,” Vodacom CEO Shameel Joosub said following the Tribunal’s decision.

“Our investment of up to R14 billion would have changed millions of lives and created thousands of jobs.”

Maziv also said it was disappointed by the outcome but respects the Tribunal’s process.

“We will await the reasons for the prohibition to consider our options and remain committed to driving innovation and economic growth through the power of connectivity,” it said.

CIVH results

Remgro’s interim results also provided insight into CIVH’s performance in the six-month reporting period that ended 31 December 2024.

CIVH’s revenue for the six months increased by 7.9% to R3.39 billion, which Remgro explained was supported by subscriber uptake growth at Vumatel and increased demand for DFA’s fibre-to-the-business (FTTB) products.

The company’s EBITDA from continuing operations increased by 6.5% from R2.09 billion to R2.22 billion, driven by revenue growth. Demand from enterprise and retail customers contributed to increased uptake.

The CIVH group also increased its spending on security-related and maintenance costs to ensure the safety of its workforce and maintenance service provider staff in the field while maintaining a high standard of network
uptime and service levels.

“These additional costs have resulted in a slight erosion in its EBITDA margins against the comparative period, but is expected to normalise over the near term,” Remgro said.

CIVH also reported lower contributions to the overall group’s results due to increased borrowing costs from higher average debt balances and a negative fair value adjustment on an interest rate hedge.

Individually, DFA performed well in the six months. The results revealed that it now has over 14,351 km of fibre assets and owns fibre networks in Johannesburg, Cape Town, Durban, Midrand, Centurion, and Pretoria, as well as in smaller metros such as East London, Polokwane, Tlokwe, Emalahleni, and George.

DFA group’s revenue for the six months increased by 3.5% to R1.39 billion, driven by demand in its FTTB vertical.

Similarly, Remgro revealed that Vumatel also performed well, having achieved a market share of approximately 33% in the FTTH market both in terms of homes passed and connected homes in South Africa.

“Vumatel remains a growth asset for the group as it continues infrastructure expansion into identified lower Living Standards Measure (LSM) areas and accelerating connections in both its traditional core network and lower LSM reach areas,” the company said.

Vumatel group’s revenue for the six months increased by 11.1% to R2.02 billion compared to R1.82 billion in the prior period, driven by its fibre infrastructure expansion programme and subscriber uptake growth for the period.

CIVH’s headline earnings