Holding group Remgro says that it is participating in a rights offer being undertaken by its 55.2% held investment, Community Investment Ventures Holdings Proprietary Limited (CIVH), that successfully raised
R3.72 billion in equity.
Prior to the transaction, Remgro held a 55.2% stake in CIVH. CIVH, in turn, owns the fibre network operators Vumatel and Dark Fibre Africa (DFA). It acquired 100% of Vumatel in May 2019.
CIVH said it will use the funds to repay all its debt at the holding company level, which was previously incurred in support of the acquisition of Vumatel.
“This equity capital injection will strengthen CIVH’s capital structure and enable it to retain flexibility to capitalise on future opportunities,” it said.
“Remgro sees significant opportunities ahead to further growth in both of CIVH’s largest operating subsidiaries, as the extension of Active Ethernet, Gigabit Passive Optic Network and Reach expands to new regions for Vumatel, and the flexibility of the business model continues to see strong growth in long-term contracts and annuity income in DFA.”
Remgro said it remains committed to developing South Africa’s information technology infrastructure, seeing both attractive returns as well as the positive impact of job creation and broader access to the economy being created.
Despite the difficulties of Covid-19, CIVH’s revenue grew by more than 25%, while the group remained highly cash generative and invested in excess of R3.5 billion during the prior financial year into expanding its operations and network.
Remgro’s Pieter Uys, said: “Following the rights issue, CIVH is well funded and positioned for its next phase of growth. This further allocation of capital reaffirms our support for the CIVH team, market position and broader investment into developing the South African broadband telecommunications infrastructure, enabling jobs and access to the economy’.”