African Rainbow Capital (ARC) Investments plans to offload its remaining stake in fibre network operator MetroFibre Networks, it said on Thursday.

ARC Investments, which is also a 20.2% shareholder in telecommunications operator Rain, holds 8.7% of MetroFibre, according to a company spokesman, who confirmed an agreement has been reached to sell the stake. It isn’t disclosing the buyer yet.

“The ARC fund has reached an agreement to dispose of its entire investment in MetroFibre, pending regulatory approval. The fair value recognised was calculated as the net present value of the expected proceeds to be received from the disposal,” ARC Investments said.

In the six months to end-December 2021, MetroFibre, which makes up 2% of the ARC fund value, delivered “satisfactory performance … notwithstanding some challenges in its infrastructure roll-out as a result of Covid-19”.

ARC’s effective investment in MetroFibre increased from R268-million at 30 June 2021 to R275-million at 31 December 2021 due to a fair-value gain of R7-million.

In March 2021, the fibre operator raised R2.5-billion in debt financing, led by Investec, adding to the R1.5-billion funding round led by Old Mutual Alternative Investments’ African Infrastructure Investment Managers (AIIM) months earlier.

The Investec-led round would be used to support MetroFibre’s fibre network roll-out across South Africa, including deploying infrastructure in underserviced homes and businesses, MetroFibre said at the time.