A unit of Remgro [JSE:REM] bought part of fibre provider Vumatel, as South Africa's richest man seeks a greater share of the country's expanding broadband network.
Community Investment Ventures Holdings, in which Johann Rupert’s investment vehicle is the biggest shareholder, took a 35% stake in the fibre provider and has agreed to take full ownership at a later date, it said in an emailed statement on Friday. The company didn’t say how much it would pay.
Bloomberg News first reported the deal in March. CIVH already owns Dark Fibre Africa, which has a network of about 10 000km of fibre, and the plan is to combine the two businesses, director Peter Uys said by phone.
While the new entity could consider a stock market listing if it needs to raise funds, there are no plans at this point, he said.
"We have been very successful in building an extensive fibre network, and by buying Vumatel, we will accelerate our fibre-to-the-home business," he said.
Vumatel, which helped to pioneer the fibre-to-home industry in South Africa after entering the market in 2015, has enough fibre to connect 350 000 houses, said Uys.
Households in cities including Johannesburg, Cape Town and Durban are increasingly seeking higher speeds and more capacity to handle rising consumption of data for services including video streaming.
Dark Fibre trails Econet Wireless Global unit Liquid Telecom in terms of network size.
The company has raised R1.25bn in debt funding and extended a revolving credit facility to R1.1bn to fund expansion, according to its website.
Rupert has a net worth of $7.9 billion, according to Bloomberg Billionaires Index.