Telkom SA SOC Ltd (TKG) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Telkom Conference Call on the Disposal of Swiftnet. [Operator Instructions] Please note, this call is being recorded. I will now handover to the group CEO, Serame Taukobong. Please go ahead.

Good day, everyone. On the call with me is our Group CFO, Nonkululeko Dlamini; the Investor Relations team and our M&A team. We are hosting this call to discuss the SENS that was released on the disposal of Masts & Towers business housed in Swiftnet and the withdrawal of the cautionary. I will summarize the details of the announcements, and then we'll move to the Q&A to answer any questions if you have. Swiftnet disposal and withdrawal of the cautionary. We have entered into a sale agreement with an entity incorporated for the purposes of the acquisition by a consortium comprising of an infrastructure fund managed by a subsidiary of Actis LLP and a vehicle owned by Royal Bafokeng Holdings Limited as its BEE partner for the 100% disposal of shares in the Masts & Towers business of Swiftnet for purchase enterprise value of ZAR 6.75 billion. This is a pivotal milestone in Telkom's commitment to enhancing shareholder value and focusing on core business competencies, while retaining use of tower infrastructure, further complementing the strategy that are earlier presented of building Telkom as an InfraCo. Key to this is, of course, that towers are not a whole key requirement for building our infrastructure business and thus our focus on releasing this. The rationale: This disposal is in line with our value unlock strategy, premised on the Board's view that Telkom's market capitalization does not represent its intrinsic value. At the enterprise value of ZAR 6.75 billion, this deal constitutes more than 50% of the current market cap, reaffirming our view that the market does not represent our intrinsic value. The salient terms of agreement. The purchaser, TowerCo Bidco Proprietary Limited, as entity incorporated by the consortium for the purpose of the acquisition and compromising -- and comprising, sorry: one, an infrastructure fund managed by Actis, which would hold the minority shares in the purchaser; and two, Royal Bafokeng Holdings, which would hold no less than 30%. As we have previously communicated, the disposal is a category 1 transaction in terms of the JSE Listing Requirements, thus it will require shareholder approval by ordinary resolution. Other conditions of the disposal to be fulfilled will include: obtaining approval from the competition authorities, obtaining approval from ICASA, as there will be a change of control of Swiftnet licenses. The purchase price for the transaction is based on an enterprise value of ZAR 6.75 billion and will be subject to the adjustments as outlined on the SENS for cash, debt, capital expenditure as well as working capital. The agreement will take effect as soon as conditions are or [ CTs ] are fulfilled. The use of the proceeds. As we've mentioned in past engagements and reiterated on my announcements, proceeds from the disposal will be utilized primarily to pay down debt, thereby strengthening Telkom's balance sheet, and enabling the release of free cash flow for investment in our core businesses, namely Telkom Consumer and Openserve. We will also deploy some of the funds to pursue growth opportunities. A reminder that the disposal will not trigger a special dividend for shareholders. Board support. The disposal has the support of the Board, which recommends that shareholders vote in favor of the resolution to approve the Disposal. In terms of the next steps, the circular containing full details of the Disposal and convening a general meeting to approve the Disposal of Swiftnet will be issued to shareholders in due course in compliance with the JSE Listing Requirements. The salient dates and timings related to the disposal include the dates of the general meeting for shareholder approval will be in the circular. The transaction will then be subject to regulatory approvals, as mentioned before, i.e., the South African Competition Commission, as well as Independent Commission of South Africa, ICASA in its capacity as the regulator of the telecommunications sector. As particulars of the disposal of Swiftnet have now been announced, caution is no longer required to be exercised by shareholders when dealing in Telkom securities and thus has been withdrawn. I will now hand over to the operator for questions and answers.

[Operator Instructions] Our first question is from Jon Bradley of Absa.

Just 3 from me, please. Firstly, on the transitional service agreements. Does this imply that there are no longer -- or no longer lease contracts -- or sorry, longer-term lease contracts at this stage? Are these transitional service agreements over and above the existing lease contracts? Secondly, can you give us a sense of what the lease liability will be for Telkom after the sale, as well as the net EBITDA impact? And finally, are you able to disclose what the escalation are likely to be in the lease agreements?

The next questions are from [indiscernible]of News 24.

Jon has really just asked all the questions I wanted to ask. Can you sort of perhaps tell us if the largest shareholder, that's the government and the PIC, what is their attitude to this if they have at all been conversed?

The next questions are from Madhi Singh of HSBC.

Can you hear me?

Yes, we can hear you now.

Yes. Okay. Sorry. So my first question is your expectation in terms of how much cash you are expecting to come into the company post transaction. Because you mentioned about the debt at Swiftnet and so on. So just it will be easier for us to understand if you give a number if all the conditions are met, what will be the cash into the company. And then second question is, how -- would there be a capital gains tax applicable on discussion? And is there other tax which we need to be aware of, which has to be paid for? And finally, does it change your CapEx plan in any way post transaction, especially given that towers will no longer be with you, does it also mean any negative impact on earnings? So if you could talk about that.

Okay. Can you take those 3 or 4 for now.

Yes, I think we can -- thank you very much. Serame, maybe I can start, and you will probably add on some of the questions. And if I can just start. Nonkululeko Dlamini here -- If I can start with your question around the lease liability and what it means for our balance? I just want to highlight in the first instance that this business in Telkom has been servicing our divisions, specifically Consumer and Openserve. So now with this sale, there will be no impact as such because both Consumer and Openserve would have already been disclosing working with this arrangement as a lease liability at unlent level. And that's how we have set it up internally. So what the difference is now is that instead of working with one of the subsidiaries of Telkom in Swiftnet, it will work with an external party. So it will be a lease liability from the external cost aspect that we'll have to disclose in our financial statements. And we do follow the requirement of IFRS-16 in that regard. And there was a question around the specific numbers in terms of what that means in EBITDA, we will disclose all those details in the detail that we will issue with circular. And that work is in progress with -- ourselves and our auditors are finalizing that, so we will basically disclose all those details in that. But maybe lastly to just indicate that in the disclosure that we will show in the circular, we're quite comfortable that this transaction is considered to be value accretive in the company and for the shareholders as well. The question around the debt in Swiftnet, yes, there is a debt element and it is then going to be part of the circular details that we will issue, but it is included in the financials of Swiftnet that we are working with. And maybe I can also comment on the capital gains tax. There is work that we are also going to include in circular around the tax implication of the transaction. But maybe I can indicate that for the calculations that we have done, we will have to take into account the offsetting of the tax loss provision that we are dealing with receipt of revenue. So net impact, we don't see a significant cash outflow in the payment of tax based on the work we've done and the impact of the transaction. Maybe Serame, you can deal with the question, I think it was around the shareholder attitude towards the transaction, and I'll pick up any others that may -- I may need to pick up on. Thank you.

Thank you, Nonku. I think on the main shareholders, like other all shareholders engaged on this journey, the shareholder have not indicated any negative sentiments towards this transaction. And so far, they have been positively inclined towards it. They will be engaged equally, like other shareholders as we are doing in this conversation right now. There was the question of the service agreements. Obviously, all these existing service agreements, so Swiftnet has service agreements with mobile network operators in Vodacom as well as Telkom Mobile. These service agreements have been renewed and do exist, as these are long-term agreements. They do proceed in the current process and in the long term. CapEx plans, in terms of the existing CapEx plans, if I talk to Telkom Mobile CapEx plans, just to shed color, Telkom Mobile is currently on just under 8,000 sites. The commercial sites that sit under Swiftnet are 2,900 of those. Telkom Mobile's expansion is not materially affected by the 2,900 sites that sits in Swiftnet. Those expansion plans of Telkom Mobile will continue and abated as per the existing expansion plans. That was that one. Capital gains, you talked about. We could not obviously shed color on the final cash amount, obviously, subject to the settlements that Nonku has talked about, which will be contained in a detailed circular to be circulated. I think those are most of the elements. Nonku, did I miss anything?

I think you covered everything that I had on my list as well. Thank you, Serame.

Okay.

The next question is then from Nadim Mohamed of SBG Securities.

And well done on achieving what looks like an attractive price for the towers. Just a few questions on my side. Firstly, could you confirm that there is no high currency or dollar component to the lease rates post conclusion of the deal? Secondly, my understanding is that the acquirer will take over Swiftnet as it stands right now and Telkom will then be the anchor tenant for most of these sites. Are there any new services that you are subscribing to post the transaction, like power-as-a-service transactions or any other revenue streams that are part of this particular contract? And that you think that we are probably quite close to you moving into a close period, I was wondering if you could give us an update on how Mobile, Openserve and BCX are trading relative to the trends we saw in the last set of results?

The next questions are from [ Noni Tabora ] of [indiscernible].

And once again, congratulations on this transaction to Serame and the team. What I did want to get clarity on, and maybe it has been touched on, the press release seems to indicate that you are only selling 3,900. Is it 3,900 or is it 2,900? And I guess if so, what was the rationale of leaving the balance out in sort of total disposal? You just indicated that some will still Telkom Mobile, i want to get some sense as to what are, in fact, the actual numbers that are being sold to Actis consortium and what becomes of the balance of portfolio?

The next questions are from Jonathan Kennedy-Good of Prescient Securities.

I just wanted to check whether you've put any restraints on the buyers in terms of how much they can gear up these assets? Because I think in the past, what we've seen with asset sales is that they've been welcomed initially, and then these private equity companies, they gear up these businesses very heavily and then can't assist you with the -- with your CapEx rollouts, with our network rollouts, and ultimately can become problematic if they take on too much gearing. So just trying to understand how much gearing they're taking on -- in this process.

Is that all the questions?

Those are the questions for this round.

Nonku. I can go?

I can go in this, Serame. And maybe what I will touch on the question in relation to the market guidance in relation to the results we issued in December. We are basically starting the closing of the books process. We're in March now. But the indications that we see right now is that the guidance that we've left with the market when we released the December updates, we are still within the range that we have indicated in terms of our expectations on the revenue and EBITDA and the CapEx intensity, probably those being the main ones that we would normally speak about. So we are fairly in line with the guidance that we've given the last time. And I think the other question was around the price, whether they give any hard currency indications. And I think from -- if you will have to run it from the price itself, we cannot necessarily talk to that. It is the biggest matter. We are focusing on the ZAR 6.75 billion price that we're working with.

And it was the dollar component. There's no dollar component in this, all in South African rand. No dollar component. In terms of the anchor tenant, we -- Telkom Mobile is 1 of 3 tenants. As I indicated, there are 3 tenants, 3 key tenants, Vodafone, NGN, Telkom Mobile. All long-term market lease agreements have been assigned and sealed for all those 3 key tenants. Obviously, on some of the other higher towers, like we indicated, there are other tenants, like your TV stations, satellites, radios, et cetera, those 2 have also been sealed. Nonku?

Yes, Serame. Then the next question was on the new service like power-as-a-service. We are already consuming those services as part of the business. For both the services that are offered in Consumer and Openserve, we are already consuming them and that continues as part of the services that the new owner will provide to Telkom and rest of the market. It is nothing different from the Telkom's point of view as a perspective.

Noni, you asked a question of 2,900 versus 3,900, let me shed clarity of that. What we talk of is what we call commercially active versus non-active. So you'll see 2 numbers being quoted. There is ecosystem of just under 4,000 towers in total, those are the towers being disposed of. Then you will see what is referred to as 2,900, just rounding off, I think the actual numbers will be in the circular, those are towers that have tenants and are commercially active. Now we also excluded in there which were the towers that were called as the strategic towers, and you'll see the detail in there. So those are towers like the Hillbrow Tower, which is the big tower in Hillbrow. So those would be the tower itself is retained as a property of Telkom, but the buyer has full access to renting that space and being commercially active on that space. But the physical property itself belongs to Telkom. But those are few in numbers. So when you see that comparison, that's what sometimes creates the confusion. So there are towers, poles, the total number is just under 4,000 is what you call commercially active, where there is now physical towers, which are tenanted and have rentals. And that's the difference that you'll see in this. So the full local stock is being sold. Jonathan, in terms of your restraints for gearing, there has been no restraints that have been put up on this. We have no expectations for the entity to be part of our further capital rollout. Like I said, in terms of where Telkom Mobile sits in their expansion, a significant portion of the footprint that Telkom Mobile is using sits outside what is currently in the commercial active footprint that the new entity will own. I hope that covers most of the questions.

The next questions are from Preshendran Odayar of Nedbank.

Congratulations on it. I've got a few questions, I'm going run on them quite quick. Just wanted to clarify, first, you're selling the business of Swiftnet. Now, can you sell the electronic communications network licenses that come with the business as part of it? Or is it something that the new acquirer has to apply for new, i.e., CNS and ECNS licenses to carry the traffic? And then just a clarification on that lease liability question. I think the question might have been phrased -- I'll try and rephrase it, but I think before you consolidated the results of Swiftnet, so we couldn't really see a lease liability number in Openserve and Telkom Mobile. Now that is we'll be sitting outside of the entity, you won't consolidate it. So I think the question is what will a lease liability number look like on the balance sheet of Telkom? And you can give it to us on a pro forma basis as of the interim balance sheet that you provided as at end of -- in November last year. Third question is, is there any restrictions on retrenchments as part of the sale agreement, thinking about when Telkom bought BCX and the restrictions that were imposed then. Is there similar restrictions being imposed on the sale? And then just 2 more. With the -- would the lease agreements that you've said that you've signed with Telkom and NGN and Vodacom and the like, will the sale of the business, being a change in owner effecting your these lease agreements and what I am alluding to here is similar to what happened with Vodacom win, the Cell C transaction happened and that affected the distribution of Vodacom from a Blue Label perspective, just want to see if that anything happening there. And then the last question is, as part of the sale, are you also selling the rights to build more towers. And if you can share how many [indiscernible] rights do you have that can form part of the sale? So I know it's quite a bit. So hopefully, you can answer some of it.

Thank you. Serame, maybe I can start with the clarification on the lease liability question. So it is quite correct that in the Telkom consolidated group, you would not have necessarily listened the number because it would have been netted off between the business units. And as it is indicated there, the house that we listed, quite significant portion that we already leased externally. And those we already showed as external lease liabilities, and we would then have to add the portion of leasing these externally into that number that we already disclosed in the financial statements. In terms of the actual numbers that we would disclose in the financial statements, we will indeed have that explicit in the circular in numbers. But it would be in the number that we would have had for both Openserve and Consumer, but consolidated group that is now going to be an external number. And we look at it and not see a negative impact in the numbers that we've reported previously, except that it will not be external.

Obviously, question in the ICASA approval is then for the license approval of the ECNS which then also covers the Section 22 obligation. So ECNS then intrinsically covers then the right of the license owner to build further towers, that is covered in that. Secondly, attached to that, if Telkom requires in itself to build more towers, it will have to go through this entity to build more towers, which talks to the second point, the change of ownership is covered, has been covered then in the extensive renegotiation and signing of those long-term market lease agreements with particularly NGN -- well, also NGN, Vodacom and Telkom Mobile. That is why those 5 plus 5 or whatever tenure those negotiated. But they are long contracts that had to be signed with this entity to reflect that change of ownership. To answer the question of retrenchments in the Section 189 process that took place early last year, the people, all the individuals that were directly involved in the current running [ vein ] of Swiftnet were ring-fenced and were not affected in the 189 process that took place in Telkom, specifically with this transaction in consideration. So I think we've covered all the questions that you asked.

The next questions are from Godwill Chahwahwa of Coronation Fund Managers.

And congratulations on the deal breakthrough. Just a quick question on the details underlying the leases that your Mobile business has with Swiftnet. You might have talked about this. I might have missed it because my line did go off on it. But what are the broad terms between what's the escalation? I know a question was asked about dollar leases, whether there is any dollar component to that, I suspect that, that your answer there was that there is isn't. But what is the duration of the leases that your Mobile business has on these towers with business and what kind of escalations were embedded in those leases?

The next questions are from Myuran Rajaratnam of MIBFA.

Firstly, congratulations on getting the deal across the line. Secondly, just following up from Godwill and Nadim's question. Can you just -- sorry, I'm just trying to get this in my head, is absolutely no dollar lease part to it? And your payments, there's no dollar component to it, right? Because Actis is a dollar company, and we have this problem in Nigeria, there's a dollar component that -- when the land goes, it's going to hit. So I just sort of double checked, there is nothing of that sort. And then secondly, thank you for the update on how the trading has been in the business. But can you give some more color on the operational side? You're doing well on the prepaid side in the Mobile business. Is that continuing at a similar sort of run rate? And also on Openserve, homes passed, homes connected, are they all sort of flipping along at a similar sort of run rates square?

The next question is from Nadim Mohamed of SBG Securities.

Just a few follow-ups from me. Just in terms of your lease rates with the new entity, are there any other changes? I'm just thinking, if I look at other tower companies on the continent, they typically pass through CPI inflation, power escalators as well. Are there any new components like that in terms of the new agreement that you signed with the entity itself? I would really appreciate if you could explain that. And if you just give us, let's say, some comfort that based on the latest terms and conditions, are you confident that there will be accretion in terms of the lease costs being lower than what you said in terms of interest expenses and in terms of your net debt-to-EBITDA trending down post the transaction?

Right. I can answer those. First, I think what's important is -- and I can see where the dollar question are coming from. So this contract is being signed with the South African arm of Actis. So this is not with the International arm of Actis, it is with the local LLP, local arm of Actis. It's rand denominated. No dollar-linked contractual agreements whatsoever. So if you take, for instance, from a Telkom Mobile perspective, it is the existing contract that Telkom Mobile has or had with Swiftnet, which was obviously rand-denominated. I obviously cannot disclose the contract details that Swiftnet has with Telkom Mobile. The contract that Telkom Mobile has with Swiftnet is exactly on the same terms that Swiftnet would have had with Vodacom and NGN. There was no favorable citizen rates in there. So the commercial terms are exactly what Vodacom or NGN has, which is rand-based. The increases as such are similar to what they would have had. And I think typically, it's either CPR or CPI related. There are no surprises in that regard. We certainly do not expect any surprises or increases which would result in untoward costs, which would affect the Telkom Mobile debt-to-EBITDA ratio increasing. So that's very important. I know you would certainly like to get a market update. This call has not a lot of market update. I think Nonku indulged in a bit more than what we intend to do in this call. But needless to say that as we are heading towards a close period, we are comfortable that the indicators that we've given to the market in our last call are heading in the similar direction to what we've given you. And that is unfortunately as best as we can give for now. I think those were pretty much most of the questions asked by Godwill, Nadim and Myuran.

The next question is from Mundra Duma of PSG Asset Management. 7

Can you hear me?

Yes, we can.

Just want to give congratulations on this concluding the transaction. Quicks one for myself, just wanted to understand because you're saying that the proceeds for the transactions will basically be going to be applied to debt. Just your indications, Serame, in local level on just your comfortable level of net debt-to-EBITDA that you'd like to kind of get to, given the fact that you are within your target as it stands today. So just wanting some color on that and I guess the proceeds left post that, what is your plan on that and just in order of priority as per your capital allocation plan will be quite useful for us.

The next question is from Madhi Singh of HSBC?

Yes. Just a couple of follow-ups. On this shareholder loan, if you could clarify, what -- I mean what is the reason why the loan still is on the books there? Why was it not settled earlier? And the second question is just following up on the earnings accretion part. Are you comfortable in saying that the deal is accretive on earnings level as well? Or your comment earlier was purely on a value perspective, not on earnings perspective. So if you could give some indication on the earnings accretion part will also be helpful. And then a very quick one on your strategic towers comment you made. Just wondering how many such towers are there? And when I connect that question with the question you answered about licenses which you are transferring to the new. I'm just wondering how -- under which license then you are owning these strategic towers still? Wouldn't you need a license to own and run those strategic towers as well separately? So -- and if you have the license, then why can't you roll out new towers under that license?

The next question is from [indiscernible] of News 24.

Sir, on Nonku. Level, perhaps just the historical figures, what is the latest outstanding debt, please? And how many people exactly are employed by Swiftnet?

Thank you. Serame, maybe I can just start on the question from -- maybe I may start on [indiscernible]question on the debt. So we have been tracking the debt, but you can probably talk to the history of it. We have currently just over [ ZAR 350 ] million still outstanding. So that is what we are working with in the books of Swiftnet. And the details of the history of the debt and I'll just ask you, Serame, to touch on that. And then on the question of the proceeds and where we believe we will be comfortable in our net debt to EBITDA level, we've indicated that we would like to play in the range of between 1x to 1.5x. That's where we would be comfortable, that we are leveraging the balance sheet, but we are not getting to uncomfortable levels with our leveraging because it just gives us the space to go a bit low, closer to 1x but also go up to 1.5x when there is any requirements that we feel it is worth going to those levels. And hence, we then want to apply the proceeds to get our debt levels down as a first priority. And the proceeds that we would be left with after making sure that we have compatible levels with debt, would be -- the process will go through with the Board. And I think in the same statement, we've indicated that it should not be an expectation that it will be a special dividend approach. We will look at the areas that will be critical to apply the proceeds into the business working with the Board. But critically, the priority is to reduce the debt level to the range that we want to drive at. And Serame, then maybe you can touch at the history of a loan and the other questions?

Yes. I think history of the loan started at ZAR 500 million. I think it's down to the levels that you talked about. And I think that's the way it is. The direct number of people who service the business directly is 26 people who, like I said, have been ring-fenced and not affected by the Section 189 process that took place early on. I think that covers most of the questions. Is that right? The towers licenses. So the towers licenses, what I'm talking about here, is if you look at the infrastructure, the infrastructure is the physical infrastructure. So some of the physical infrastructure, so the concrete towers, and some of those concrete towers are used by other government agencies, so the military for military related matters. So we would not need a license to operate those. So the ownership of that property is for usage or other matters that did not require Telkom to have a license. I hope that answers your question.

And if I may just maybe add, Serame, on that question. So Swiftnet had its own license, ECN license. Telkom has its own ECN license as well. As part of the move, Swiftnet then is moving with its own license to do the trading. We are not going to be a compete business in towers with the business that we just disposed of. So that's what we are doing. So what is left of the towers is the concrete towers that are key and strategic to Telkom that we see as part of our key national points. That's the assets that are left. Your Hillbrow Towers, you look at them, those are the type of assets that we are having left, but not us using them to get into a towerCo business again. There is a license for us to trade as a telco. They have the license that was [indiscernible] Swiftnet that is moving with them. I think that answers that question. There was a question on number of sites that we are disposing of. As we have it in circular, we have about 3,900 active sites. That's the volume of number of sites that we have, over 3,900. This number changes as new sites goes on live on air, every time as we report on them. I think the last take that we took was about 3,900. That's the number of sites that we have that are active sites that have tenants on them. The portfolio has a number of that might not have tenants on them. The number we reported is what's active. I think, Serame, that covers the questions on our side.

You have follow-up questions from Myuran Rajaratnam of MIBFA.

Serame, you mentioned that this value unlock strategy from the executive team and the Board is a multistep process, and this is the first step, Swiftnet. Every time I look at the valuation for Openserve versus some of your peers like CIVH, it's sitting at ZAR 50 billion EV at the moment and I will do a little tap dance. So I just wanted to confirm that, that is still ongoing value unlock, it's just the first step in it, right? And the rest will come when they come, yes?

The rest will come when they come square. The rest will come when they come.

Then the next question is from [ Roman Latuma of PSG Asset Management ].

Just a quick one from me, just a follow-up. The 1x to 1.5x, is that ex IFRS 16 or including IFRS 16? As a case, I guess just kind of getting a sense of where we should sit. And then I guess the next question from me from just -- for Serame would be, okay, then what's next step? Can you just give us time lines on at least the next follow-up on the anticipation of the transaction to fully close, the process that follows from now the announcement and the legalities of, this [ Com Com ] and all of that. I guess what we're trying to kind of understand is if you foresee a risk where the deal basically goes sideways and it gets delayed because of any, I guess, regulatory hurdles that you guys are not able to meet.

The next question is from [ Noni Timber of Media Litel ].

I'm just following up on this other question that has been asked. If my understanding is correct, Telkom will now only be using Actis, not only for the current portfolio but also so for their future requirements. It sounds to me that this is on an exclusive basis, i.e., no other TowerCo could come along and provide services to Telkom other than through Actis. Is that the case? And if that's the case, is there no concern about how the Competition Commission might view this arrangement and therefore potentially derail the deal?

We have no further questions in the queue at the moment.

Thank you. Maybe...

Let me shed clarity on the last one. So it's very important to get it. So if Telkom wants to build a new tower on a Telkom site, first preference must be given to Actis. That is Telkom building a tower on a Telkom site. If Helios says "I have got 5 new sites. " There is no exclusivity, there is no requirement for us to go to Actis first. So Telkom Mobile can continue to buy sites from anybody that they want to buy. It's only if Telkom says, "I have got a switch where I want to build a site which is what Swiftnet net would have traditionally done." That first preference goes to Actis. So Competition Commission would not be a problem here. But if any other telco, Helios or IHS says, "Hey, I bought 5 new sites." Telkom Mobile is free to go to anybody to buy those. So I just want to make clarity on that one there.

Thank you, Serame. Maybe I can also give clarity on the net debt to EBITDA levels that I mentioned. [ Nomandla ], it is inclusive of IFRS 16 requirements, the range we're working with, and that's how we would report.

And the last one on timing. We've given ourselves 8 to 12 months in terms of the deal being fund concluded. That's the time of going through all the approvals, ICASA, Competition Commission and all the elements contained therein. If we look at, for instance, from Competition Commission, as Actis does not currently operate in South Africa, it is not a compete in TowerCo. We feel comfort in that regard. We have started the process in parallel in submission, submitting all these requirements to various entities to start that process. The first, of course, has been the JSE regulation, as we said. Following the SENS, there will be then the circular with all the details as we discussed, being so connected to all the shareholders resulted in that EGM, wherein the shareholders will vote. That process had to happen 60 days from today. The circular will be in the market in the next 2 to 3 weeks to make sure the shareholders are well informed of the details. And then the EGM, Extraordinary General Meeting, will be called for the shareholders to vote on this transaction and as the other matters of getting the regulatory -- various regulatory approvals are sought runs in parallel.

We have no further questions in the queue. Would you like to make some closing comments?

So thank you all for, one, attending our call; two, for your patience with this journey, I know it has been a long one. I know press did call it the runaway bride but we have finally landed. I think the prudence that we needed to apply to this process, although i would say, it was a complicated one. It certainly was not a very easy transaction given the complexities that contained in some of the privileges that Telkom enjoyed having things like Section 22. But it was important for us and especially for shareholders to make sure that we get the best deal possible for our shareholders. We hope that the price and the quality of what we've delivered will meet your expectations. We did promise that we will close this before financial year-end, and we have done our best to deliver that without compromising quality and price. And we trust that you will all vote favorably so that we can proceed then with the next big projects that -- and deliver that also with speed. Thank you very much. And if you do have calls or questions, do reach out to our investor relations team as per usual. Thank you very much and do have a good day onwards.

Thank you very much, sir. Ladies and gentlemen, that then concludes today's event, and you may now disconnect your lines.