Telkom’s tower deal draws closer to the finish line. Remember about the deal Telkom had in place to sell its Swiftnet tower? Well, that deal in question will soon be over as the company is just putting the final touches to it.
Telkom’s Tower Deal Draws Closer to Finish Line
Telkom is gearing up to announce the sale of its Swiftnet tower and masts by April 4, 2024. In a shareholder update, the South African telco highlighted significant progress with the potential buyer, with negotiations focusing on transaction specifics.
As per JSE requirements, Telkom must provide updates every 30 business days after issuing a warning, so stakeholders should mark their calendars accordingly.
The Deal Has Been In Motion since November 2023
The deal has been in motion since November 2023 when the telco disclosed advanced talks to sell its cellular towers. The prospective buyer consists of a consortium of investors, including a private equity firm leading the effort and a Black Economic Empowerment partner.
If all falls into place, regulatory approval and consent from Telkom shareholders will be necessary, despite the buyer group’s interest. Originally, the plan was to list the Towers business on the JSE in 2022. However, due to unfavorable market conditions following Russia’s actions in Ukraine, the plan was put on hold.
What Will Happen After the Deal Has Been Finalized
Once the deal is finalized, a portion of the proceeds will fortify Telkom’s financial position, addressing its cash flow gaps. While discussions of a future special dividend exist, they are not a current priority. Despite positive progress, Telkom is urging shareholders to exercise caution and refrain from premature celebrations.
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