African Rainbow Capital, the black-owned investment company chaired by billionaire Patrice Motsepe, has acquired a 20% stake in 4G/LTE operator Rain (formerly Wireless Business Solutions).
The value of the deal has not been disclosed.
“We are delighted to partner with African Rainbow Capital and look forward to the strategic value they bring to the team,” said Rain chairman Paul Harris in a statement. “In addition they enhance our already significant BEE ownership credentials.”
It’s not the company’s first investment in the telecommunications industry. African Rainbow already has a stake in Metrofibre Networx, a fixed-line fibre broadband provider headed by former Absa CEO Steve Booysen.
In the statement, African Rainbow co-CEO Johan van Zyl said the company focuses on South African and African businesses that deliver “exceptional returns on equity”
“It is exciting to invest in a company that is at the start of its growth trajectory,” Van Zyl said. “There is great demand in our country for fast, reliable and affordable data coverage and Rain promises to deliver just that.”
Rain has rolled out over a thousand sites and 1 500 base stations, and is on track to meet a target of 2 000 sites by the end of the year and 5 000 within three years, said Rain CEO Duncan Simpson-Craib.
“The additional equity capital raised from African Rainbow Capital, over and above the funding already in place, ensures that we have the capital to achieve our aggressive roll-out targets over the next three years,” he said.
Last month, Bloomberg reported that African Rainbow Capital planned to raise more than R3bn in a listing of its investment-holding unit.
Quoting unnamed people familiar with the matter, the news agency said the company will fold its non-financial services assets into the company and list the unit’s stock on the JSE. The share sale is scheduled to take place by the end of September and may even raise as much as R5bn, the sources said.
Rain recently entered into an agreement whereby Internet Solutions, part of Dimension Data, and its partners will provide clients with wireless broadband services powered by the Rain network. — (c) 2017 NewsCentral Media
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