French-based joint stock company STOA has acquired a 23.08% significant minority stake in South African open access fibre network operator, Metro Fibre Networx.
STOA is a joint stock company owned by Caisse des Dépôts and Agence Francaise de D’eveloppement with a capital base of £600 million allocated for investments in equity and quasi equity in developing and emerging countries. Capital have been set aside for the power, telecommunications and transportation sectors, with a strong focus on Africa.
“This transaction, which is our third investment in a major infrastructure project, will allow us to collaborate with a strong fibre operator in South Africa and to support a fast-growing company in a dynamic market with increasing demand,” said STOA deputy CEO Marie-Laure Mazaud.
The company purchased the 23.08% stake in Metro Fibre, from a portion of its capital base allocated for investments in telecommunications sectors of developing countries. It said telecommunications is a core sector focus for its future investments and South Africa is also one of its key targeted geographies.
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Metro Fibre, established in 2010, is a fibre connectivity provider for South African enterprises. Over the last eight years, it has expanded its service offering to both residential and corporate customers in line with its strategic objective of being a diversified operator. The company owns a globally compliant Carrier Ethernet 2.0 open access network and plans to establish a national network that will continue to focus on delivering better services to its customers.
Steve Booysen, the CEO of Metro Fibre said this investment would allow the operator to expand its infrastructure and achieve mass scale in the competitive local market.
“In support of President Cyril Ramaphosa’s drive to bring foreign direct investment to South Africa, Metro Fibre is delighted to be attracting STOA’s equity investment not only into our business, but into the broader South African economy”, he said. “For our customers, this transaction means greater access to quality and reliable fibre Internet infrastructure and related products. For our colleagues, this transaction means greater career prospects as the business grows, and most significantly, it will result in the further creation of employment opportunities in a country that has one of the highest youth unemployment rates in the world.”
To support the capex expansion plan, the current shareholders, which include Sanlam Life Insurance through its Sanlam Private Equity division and African Rainbow Capital Investment, agreed to contribute additional equity capital as well as attract a new investor to Metro Fibre’s shareholder group.
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