Podcast Summary
Tower Comms disposal approval: Regulatory approval for Tower Comms, Master disposal by Swiftnet is delayed due to high volume of mergers and acquisitions being reviewed by competition authorities, with conditions to be met before deal finalization
The disposal of Tower Comms, Master, and Tower's business by Swiftnet is still undergoing regulatory approval from the competition authorities. The delay in the process is due to the high volume of mergers and acquisitions currently being reviewed by the competition commission and tribunal. Previously, MTN went through a similar process when disposing of IHS, which also had complications. Despite the tribunal's approval, there are still conditions that need to be met before the deal can be considered finalized. These conditions include obtaining approval from the competition authorities and fulfilling any suspense of conditions that may be required. The M&A landscape in South Africa is currently active, with frequent updates on approvals and disapprovals from the competition commission and tribunal.
SwiftNet Challenges: Navigating regulatory approvals, securing funding through low intercompany loans, and negotiating debt were significant challenges for Taucom in relation to SwiftNet. The initial $13 billion valuation was drastically reduced to just over $6.7 million due to unfavorable market conditions after COVID-19.
The regulatory approval process, financial arrangements, and debt issues were significant challenges for Taucom in relation to SwiftNet. The CASA regulatory body needed to be navigated for approvals, and SwiftNet was funded by Taucom with low intercompany loans. Debt negotiations were also necessary. The initial valuation of SwiftNet at $13 billion in 2019 was based on certain market conditions, but the environment changed significantly after COVID-19, leading to a drastic reduction in SwiftNet's value to just over $6.7 million. The exact reasons for this decline remain unclear, but it is known that the business environment was no longer favorable for the initial valuation. Taucom had to deal with these challenges and make decisions about what to take on and what to leave behind.
SwiftNetworks valuation: SwiftNetworks' listing valuation was lower than expected at $6.7 billion, despite commercial arrangements with other operators and previous tower leasing.
SwiftNetworks, a South African tower company, recently settled for a listing valuation of $6.7 billion, significantly lower than the initial indications of around $9 billion in early 2022. The CEO, Taco Bong, seems content with the outcome. There might be commercial arrangements between SwiftNetworks and other operators regarding underserved networks, but the dynamic is different compared to the MCN and IHS deal where IHS bought all the towers and leased them back. SwiftNetworks had already been leasing out some of these towers to other operators before the listing. Overall, the company's valuation has eroded significantly over the past year, resulting in a lower listing price than initially anticipated.