Fast-expanding broadband fibre-to-the-home (FTTH) provider Vumatel has received the second and final tranche of R250m in funding from Vantage Capital, a mezzanine fund manager.
Vantage Capital said on Friday that the funds will be used for the on-going expansion of Vumatel’s FTTH network in a growing number of Johannesburg and Cape Town suburbs.
The Vantage mezzanine facility was structured in two equal tranches of R125m, to be drawn by Vumatel upon the achievement of certain operational and financial targets by the company.
“Since concluding the transaction in April this year, Vumatel has rapidly expanded its network and has exceeded the milestones required to draw down both tranches of the R250m facility,” Vantage said in a statement.
Vumatel, which was established in 2014, deployed its first infrastructure in the Johannesburg suburb of Parkhurst. Since then, the company has expanded its network to cover 22 suburbs, reaching about 33 000 homes.
“Driven by strong customer demand for reliable high-speed Internet, Vumatel has a robust pipeline of additional suburbs for further network deployment,” Vantage Capital said.
Vumatel’s founding shareholders include Niel Schoeman, Johan Pretorius and Richard Came – all industry veterans who have been key players in establishing and operating several well-known telecommunications and technology businesses including Dimension Data, Dark Fibre Africa, Conduct Telecom and the Birchman Group.
The Vumatel investment is Vantage’s 22nd mezzanine investment and the fourth investment in the Vantage Mezzanine Fund III, which is targeting a final close of R4bn and has a 40% allocation for South Africa.
Fund III supported the Servest buyout last year, and recently concluded a US$20m investment in Landmark, a Nigerian property group, as well as an R80m investment in UAG, a Namibian hospitality and property group. — (c) 2016 NewsCentral Media