Telkom has shelved plans of listing of its masts and towers business (Swiftnet) separately, citing unfavourable market conditions.
The JSE-listed telephony group says it, however, remains committed to its “value unlock strategy which is premised on Telkom’s market capitalisation not representing its intrinsic value”.
Telkom’s plans to unbundle Swiftnet from the group were first announced in September when then CEO Sipho Maseko said the masts and towers unit’s value was not fairly reflected in the company’s share price, hence the move to list it separately.
Now, seven months later, Telkom notified shareholders today that the mooted plan in now on hold.
“Given the recent global events, current market conditions and the impact on the capital markets, the board has resolved to postpone the separate listing of Swiftnet on the JSE,” says Telkom.
“The board remains committed to its value unlock strategy which is premised on Telkom’s market capitalisation not representing its intrinsic value. Against this backdrop, the board continues to consider all strategic options that support its value unlock strategy, which include affirming the valuation of Swiftnet and its contribution to the valuation of Telkom.”
Swiftnet, which has operated as a separate tower company for over three years under management by Telkom subsidiary Gyro, has 6 225 masts and towers, and is SA’s largest independently-run tower portfolio.
According to Telkom, Swiftnet has diversified its tenancy, with 56% of its tenants coming from the industry.
In the latest reporting period, quarter ended 31 December 2021, Swiftnet revenue increased by 4.6% to R317 million and the EBITDA margin decreased marginally by 0.4 percentage points to 78.5%.
At the time, group CEO Serame Taukobong said Telkom’s tower build programme remains on track, with 56 towers constructed in Q3 FY2022, amounting to 114 towers constructed in the financial year.
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