Telkom to decide on towers unit listing

People practice social distancing as they queue outside a Telkom branch during the coronavirus disease (Covid-19) outbreak in Johannesburg, on 20 June 2020. Reuters/Marius Bosch

Telkom, which spun off its telecom towers, masts and some related real estate into a separate unit in 2017, has been exploring options to unlock value in the unit, which is called Swiftnet.

"Management believes that a separate listing of Swiftnet will affirm the valuation of the Masts & Towers business and its contribution to the overall valuation of the Telkom business, thereby unlocking further value for Telkom," the company said.

The partly state-owned company is among several South African companies where investors have been calling for sales or partnerships to bolster shares trading below fair value.

"Shareholders are reminded of Telkom management's commitment to the value unlock strategy which is premised on Telkom's market capitalisation not representing its intrinsic value," the company said in a statement.

Intrinsic value is usually calculated based on estimated total cash flows over a set period in the future. It varies depending on analysts' assumptions, including how they value a company's various businesses.

MTN, one of Africa's biggest mobile carriers, said last week it plans a separate US listing for its partly owned tower business IHS.