Investment group Tiso has increased its stake in Africa Cellular Towers (ACTowers) to 31.9%, from 25.1%, making it the company's largest shareholder.
Tiso is a black-controlled and -managed principal investment company that was established in 2001. It aims to build a pan-African business with investments in growth sectors through partnerships with first league players, respected local entrepreneurs and management teams with track records.
The company's initial acquisition of a stake in ACTowers, in January last year, was for R1.25 a share. The deal was expected to give the infrastructure company a strategic black commercial partner that would add value to the company.
However, ACTowers' share has slid since then and closed on Friday at 51c. The price at which the additional shares were bought has not been disclosed.
Expansion capital
As part of the agreement, Tiso would inject additional cash into the company for expansion. ACTowers CEO and chairman Chris Kruger says: “We are already enjoying the value-add by Tiso Group investing in ACTowers since they have been on board.”
He adds the increase in investment also represents a substantial discount to the intrinsic value of the business, and has been made at a time when the macro-economic fundamentals are quickly improving, which is anticipated to result in firmer product demand in the near-term.
“ACTowers is well positioned to capitalise on the great opportunities and prospects that the exceptionally fast-growing African cellular phone market presents,” says Nkonyeni.
However, ACTowers has not escaped the recession unharmed. In the six months to August, revenue slid 37.2% ‑ from R238.5 million, in 2008, to R149.8 million. As a result, gross profit dropped 74.5%, to R19.2 million, and it made a net loss of R48 million, compared to last year's profit of R36.7 million.
The company has a presence in over 20 African countries, and is a preferred supplier and full turnkey solution provider in Africa for the telecom and power-lines industry.
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