Vumatel has concluded a finance deal with Standard Bank that will see the high speed fibre broadband provider ramp up delivery, and expand into new markets within South Africa.
Standard Bank said that the deal is likely one of the largest debt capital raising-based deals of its kind in the fibre-to-household industry to date.
The agreement with Vumatel sees Standard Bank becoming the lead financier of the company’s bid to exponentially expand its business base.
The deal was structured through Standard Bank’s business acquisition team, which concentrates on debt focused financing for top-line commercial clients.
Niel Schoeman, CEO for Vumatel said: “It is important that South Africa keeps pace with the rest of the world. We need to ensure that we invest in long term sustainable infrastructure that can support the growth in demand for high speed connectivity. That is why we plan to invest R3 billion over the next two years in fibre optic networks to service the residential sector.”
The package, with an agreed draw-down facility, will facilitate the growth of Vumatel which launched its first project in Parkhurst, Johannesburg in 2015. The company has since embarked on rolling out fibre broadband to many other Gauteng suburbs. Further targeted growth is already taking place in Cape Town.
Schoeman has set a target of reaching as many as 100,000 homes by the end of 2016.
In October last year, Vumatel and Investec concluded a deal in which the specialist bank and asset manager acquired a minority stake in the fibre service provider.
Source: Business Tech