The Competition Tribunal has accepted a recommendation by the Competition Commission that Telkom be allowed to sell its masts and towers business, Swiftnet, to a consortium led by Actis.
The tribunal’s green light comes a month after the Competition Commission said the deal was unlikely to lessen or prevent competition substantially in any market. Still, the commission recommended that “public interest concerns” be addressed.
“The merging parties have made procurement commitments to firms that are either small/medium enterprises or that are owned by historically disadvantaged persons for a period of five years from the [transaction’s] implementation date,” the commission said.
Telkom shareholders, including the government of South Africa, which owns 40.5% of Telkom, in May voted in favour of selling the Swiftnet business to the consortium made up of Actis and Royal Bafokeng Holdings, a community-owned investment holding company, in a deal that gave Swiftnet an enterprise value of R6.75-billion.
Actis and Royal Bafokeng formed a new entity, called Towerco Bidco, to acquire the stake. The former owns 70% of this entity, with the latter holding the remaining 30%.
At May’s meeting of Telkom shareholders, 100% of votes cast – representing 82.7% of the telecommunications group’s total issued share capital, were in favour of the sale. Not a single vote was cast in opposition to the transaction.
‘Pivotal moment’
Telkom Group CEO Serame Taukobong said in March that the sale, once concluded, would mark a “pivotal moment in Telkom’s journey towards unlocking shareholder value and streamlining our focus on core business operations”.
“This divestiture aligns perfectly with our strategy to concentrate on our infrastructure assets while realising the inherent value in non-core holdings… This move underscores Telkom’s commitment to fortifying its financial position, reducing debt and enhancing liquidity,” Taukobong said. – © 2024 NewsCentral Media