Telkom CEO Serame Taukobong revealed that they are in the process of selling their Swiftnet towers and expect to close the deal within the next two months.
Speaking to Moneyweb, Taukobong said they are speeding up their value-unlock journey at favourable pricing to shareholders.
“The Telkom board remains confident that the company can unlock value, and we will continue on that path,” he said. “For us, it is execution with speed and passion.”
As part of its value unlock strategy, Telkom planned to list its towers and masts business Swiftnet on the JSE by the end 2022.
However, this initial public offering (IPO) was delayed until further notice because of unfavourable market conditions related to Russia’s invasion of Ukraine.
The plan has changed. Taukobong said the Telkom board has allowed him to pivot on their Swiftnet listing plans.
“We have been given support to sell the Swiftnet towers outright. We are in the process of achieving that,” Taukobong said.
“Hopefully, in the next month or two, we will be able to announce a successful sale to the market.”
The Telkom CEO said the process is quite advanced, and they have two firm bidders for Telkom’s tower portfolio.
Part of the money from the Swiftnet sale will be used to strengthen Telkom’s balance sheet. “It will be a big contributor to our negative free cash flow,” he said.
“The cash income from the sale of the towers will help us to recalibrate our balance sheet and put more investment in capex for our fibre business.”
“Post that, we will look at whether we will consider a special dividend. However, we are not thinking about that right now”.
In February, Bloomberg reported that New York-listed IHS Holding was weighing a bid for Telkom’s tower unit.
Deliberations were focused on the structure of the potential deal, although Telkom remained open to offers from other companies, and there is no guarantee IHS will buy the unit.
According to a note from Nedbank, the Swiftnet business is worth about R8.7 billion based on future expected cash flows.