Telkom SA plans separate listing of subsidiary on the JSE

SOUTH AFRICA – Telephony group Telkom is seeking a separate listing of its Swiftnet masts and towers business on the Johannesburg Stock Exchange (JSE) as it seeks to unlock value for shareholders.

The telecommunications group, which is about 40% owned by the government, confirmed in a statement to shareholders that will seek a separate listing for Swiftnet, the masts, and towers business held by subsidiary Gyro.

Notifying shareholders, Telkom says unlocking value from the group’s portfolio of businesses is a key component of its financial framework, and it will afford management flexibility to rebase the balance sheet and reinvest in the group.

According to Telkom SA Chief Executive Officer Sipho Maseko, the current Telkom valuation is not a true reflection of its intrinsic value and the value of the Swiftnet business is currently not being recognized.

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 South Africa’s largest independently-run tower portfolio.

Over the period, Telkom says, Swiftnet has diversified its tenancy, with 56% of its tenants coming from the industry.

“Under the management of Gyro, Swiftnet has diversified its tenancy with 56% of its tenants coming from the industry,” said Telkom CEO Sipho Maseko.

“The current Telkom valuation is not a true reflection of its intrinsic value. The value of the Swiftnet business is currently not being recognized.”

“A separate listing of Swiftnet will affirm the valuation of the masts and towers business and its contribution to the overall valuation of the Telkom business, thereby unlocking further value for Telkom,” Maseko said.

The Telkom board expects to make a final determination regarding a separate listing before the end of the financial year.

Telkom Group CEO Sipho Maseko says the approach to separate Telkom’s businesses has enabled clear visibility of the growth potential of each.

 

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