Caxton sells Octotel, RSAWeb stakes


Caxton sells Octotel, RSAWeb stakes

Published Date: 2020-10-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Caxton sells Octotel, RSAWeb stakes

The publishing and printing group says the businesses need focused shareholders to take them to the next level.

Caxton is selling its stakes in Octotel and RSAWeb to private equity investor Neoma Africa Fund. It will receive R493 million for the businesses, which it describes as non-core.

The publishing and printing group first invested in RSAWeb in 2013 in order to strengthen its relationship with its network provider and give it access to capital for expansion. It followed up in 2016 with an investment in open access network Octotel and provided that business with capital to enable it to roll out fibre-to-the-home in the Western Cape. By the end of last year, Octotel had connected more than 100,000 homes, making it the largest fibre network in the province. According to its 2019 financial statements, Caxton owns 23% of the two companies.

The pro forma financial effects of the disposal show that if it had sold the stakes prior to its June year-end, headline earnings per share would have been boosted by 7.6% while its tangible net asset value per share would have been 6.1% higher at R14.34.

It said the proceeds from the disposal would be added to its existing cash reserves, pending decisions on how to best use them. The disposal is subject to shareholder approval at Caxton's next general meeting as it is categorised as Category 1 transaction.

Caxton's shares jumped 12% to R4.52 yesterday.

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