Telkom is looking at ways to generate more value from its mobile tower business, including a potential sale or spin-off.
South Africa’s former landline monopoly is “actively exploring” tower deals, CEO Sipho Maseko said after the company reported full-year earnings on Monday. “That will be a focus over the next 12 months.”
The attempt to cash in on a portfolio of about 6 500 towers shows Telkom is moving to strengthen the balance sheet and preserve cash to weather a deep recession brought about by the coronavirus pandemic.
The company suspended dividend payments for three years and scrapped all medium-term targets, while about 2 300 employees have accepted voluntary redundancy packages.
Demand for towers in South Africa may be on the rise as the country starts to build out 5G capabilities, Maseko said. Wireless carriers around the continent have been raising money from the sale of such assets, with specialist companies like Helios Towers looking to expand.
Telkom shares declined 3.4% to R26.58 as of 10.09am in Johannesburg, extending a 12-month slump to 73%. The company is almost 40% owned by the South African government. — (c) 2020 Bloomberg LP