Telkom has kicked off negotiations with a preferred bidder for the sale of its Swiftnet tower business.
The move to dispose of Swiftnet has been in the pipeline for some time, as the telecommunications company looks to unlock value for its shareholders.
Swiftnet owns a portfolio of 6 200 communication towers in South Africa.
In its previous results, Telkom said its Swiftnet masts and towers business saw marginal revenue growth of 0.9% to R1.3 billion, driven by construction of 66 additional towers and eight new in-building coverage solutions sites.
The company said it had received several offers from potential buyers of its towers and it is in the process of making the final decision.
In a statement today, Telkom says it has initiated a competitive disposal process in terms of its “value unlock strategy”.
“Shareholders are hereby advised that Telkom is currently in exclusive negotiations with a preferred bidder in respect of the potential disposal of Swiftnet, which, if successfully concluded, may have a material effect on the price of the company's securities.”
According to Telkom, the preferred bidder is a consortium of equity investors (including a black economic empowerment partner), led and managed by a reputable private equity firm.
As the negotiations to conclude transaction agreements are under way, the company will provide an update in accordance with the JSE’s listings requirements, it says.
“The transaction, if successfully concluded, will be subject to conditions precedent that are customary for a transaction of this nature, including the receipt of the necessary regulatory approvals and Telkom shareholder approval, given that it would constitute a category one transaction in terms of the JSE’s listings requirements.
“These negotiations may or may not lead to a transaction, and therefore shareholders are advised to exercise caution when dealing in the company's securities until a further announcement is made,” it concludes.