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AIIM, SAHIF and STOA sign follow-on deal in MetroFibre Networx

Staff writer
June 15, 2021, 11:08 a.m.
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Word count: 673

African Infrastructure Investment Managers (AIIM) along with a consortium comprising South African Housing & Infrastructure Fund (SAHIF), through its Digital Infrastructure Consortium platform and STOA, a foreign investment vehicle based in France, have agreed to acquire a 25.8% interest in MetroFibre Networx (MFN) held by Sanlam Private Equity, African Rainbow Capital and a minority shareholder. 

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African Infrastructure Investment Managers (AIIM) along with a consortium comprising South African Housing & Infrastructure Fund (SAHIF), through its Digital Infrastructure Consortium platform and STOA, a foreign investment vehicle based in France, have agreed to acquire a 25.8% interest in MetroFibre Networx (MFN) held by Sanlam Private Equity, African Rainbow Capital and a minority shareholder. 

Ed Stumpf, AIIM’s Investment Director, said: “This transaction secures AIIM’s investment vehicle Digital Infrastructure Investment Holdings as the largest single shareholder in MFN and underlines AIIM and the broader Old Mutual Alternative Investment Group’s continued support for the MetroFibre team as a platform for connectivity growth in South Africa.  In addition to the significant ramp up in digital volumes as a result of telecommuting during the pandemic, AIIM continues to see strong growth potential for quality high-speed digital infrastructure in South Africa and is excited to work together with the MFN management team and our partners SAHIF and STOA to deliver infrastructure which connects South Africans and enables the digital economy.”

“SAHIF’s increased shareholding in MFN to 22% ownership is another landmark for our group. We are excited to journey with MFN in its efforts to transform and grow the South African digital infrastructure landscape. The additional investment not only signifies our continued support of the MFN management team’s growth ambitions, it also further emphasises SAHIF’s commitment to finding digital infrastructure solutions aimed at accelerating delivery of service land for affordable housing. We are thrilled at entrenching our position as a preeminent participant and contributor in the telecommunications space,” commented SAHIF CFO, Kameel Keshav.

This transaction follows the R1.5bn equity funding round concluded in December 2020 by AIIM, SAHIF and STOA in order to support MetroFibre’s R3.0bn capital expansion plan over the next three years.

Marie-Laure Mazaud, Deputy CEO of STOA, said: “Over the past three years, STOA supported the management team into building one of the leading national fibre players in South Africa offering affordable, reliable and fast connectivity services, and is more than ever confident on the leading role MFN will play in the challenge of digital transition in the country. STOA is therefore delighted to consolidate its position as one of its strategic partners and to take the next steps of the company’s growth alongside AIIM, SAHIF and the management team.”

The transaction also introduces the Old Mutual Hybrid Equity Fund 1 General Partnership, managed by  Hybrid Equity (HE), a division of Old Mutual Alternative Investments (OMAI), as funding provider to SAHIF, which is owned by Rali Mampeule and Kameel Keshav and is the strategic empowerment partner to MFN.

Mujaahid Hassan, Co-head OMAI HE, said: “We are excited by the prospects this transaction opens up for MFN and SAHIF as its strategic empowerment partner. From our side, HE was able to provide SAHIF, within a very tight timeline, with a well-structured funding solution, allowing them to increase their shareholding in MFN, demonstrating our commitment as a business to empowerment and transformation in South Africa.”

“This transaction also ensures that MFN meets its growth targets of delivering quality high-speed digital infrastructure to South Africa and at the same time strengthens its empowerment credentials. Given the scarcity of empowered equity capital available in South Africa historically, HE is committed to providing innovative funding solutions enabling the transformation of ownership in South Africa.”

The acquisition remains subject to regulatory approvals and is envisaged to reach financial close during the second half of 2021.

MetroFibre, which was launched in 2010, is a high-growth player in South Africa’s Fibre-To-The-Home (FTTH) and Fibre-To-The-Business (FTTB) markets.

Over the last 10 years, MetroFibre has expanded its service offering to both residential and corporate customers, in line with its strategic objective of being a diversified operator.

MetroFibre owns and manages its core network which is a globally compliant Carrier Ethernet 2.0 open access network.

Steve Booysen, MetroFibre CEO, said:“This rationalisation of the shareholder base will allow MFN to continue with its growth strategy and play a leading role in the sector’s consolidation process, with a strong leadership and operational team and significant shareholders of reference.”

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