It was revealed on Monday that Community Investment Ventures Holdings – better known by its abbreviation, CIVH – has raised R3.7-billion in a second tranche of a rights offer, through which it has now raised a whopping cumulative R6.7-billion in the past six months.
Remgro executive Pieter Uys, who also chairs the CIVH board, said in an interview with TechCentral on Monday evening that the new rights offer tranche has pushed CIVH’s valuation to R27-billion. JSE-listed Telkom, by contrast, had a market capitalisation of R21.6-billion at Monday’s market close. A year ago, Remgro valued CIVH at R19.3-billion.There are interested outside investors who are queuing up to invest at this value
Uys said CIVH had been exploring a sale of equity about 18 months ago to raise new capital to reduce debt and provide for additional network roll-out. However, those plans were put on ice when Covid-19 hit in March 2020. But with demand for home broadband surging because of lockdowns, CIVH and its shareholders, led by Remgro, took the decision to go the rights offer route instead.
‘We couldn’t wait’
“The demand has been so big for (fibre broadband) services, especially in the home market, we couldn’t really wait,” Uys said. The second tranche of the rights offer was oversubscribed, suggesting strong shareholder backing from both Remgro and minority investors.
External suitors, including offshore entities — which Uys didn’t name — are continuing to show an active interest in buying into CIVH, Uys said. The company has previously held talks with both Vodacom Group and MTN Group about investing in it, though nothing concrete has transpired from those discussions – not yet, anyway.
Asked whether CIVH’s valuation makes sense given it’s higher than the long-established Telkom, Uys said:
And CIVH has big plans to expand beyond just fibre, he said. It remains interested in investing in the planned wholesale open-access network (Woan), a new, private-sector led infrastructure player that government hopes will help increase competition and reduce the “dominance” of market leaders MTN and Vodacom. It is also keen to establish a data centre business.
But even in the core fibre business, demand is booming – mainly thanks to Covid lockdowns.
“A lot of demand is coming from residential areas where you would not expect it, like Soweto,” he said. “Uptake in those areas is twice as fast as it is in Sandton. If Sandton takes two years to reach 50% penetration (homes connected where service is available), Soweto or Vosloorus will achieve the same penetration in 12 months.”
Vumatel offers prepaid fibre access in these areas, which has proved hugely popular, Uys said. The 20Mbit/s symmetrical and uncapped offering costs R399/month. “There is pent-up demand and our ambition is to make a difference. We really think we can democratise the Internet in South Africa.”
Source: Tech Central