Backed by South Africa’s richest man, Seacom eyes deals in East and West Africa

Seacom, a leading pan-African undersea cable provider linked to South Africa’s richest man Johann Rupert, is set to bolster its standing as one of the continent’s leading undersea cable providers through targeted acquisitions in East and West Africa.

The move, aligned with the company’s overarching strategy to expand its connectivity business and secure a greater share of the enterprise client market, follows a series of successful acquisitions and expansion endeavors.

Seacom’s CEO, Alpheus Mangale, revealed the company’s growth strategy, highlighting the crucial role of acquisitions in its expansion plans. In a recent interview with BusinessDay, Mangale stressed the importance of capital expenditure (capex) for infrastructure development and last-mile connectivity projects.

Seacom’s ambitious plans backed by $207 million long-term loan from IFC

Notably, Seacom has secured funding for these ambitious plans, with a $207-million (R3.91 billion) long-term loan package received in June 2023 from the International Finance Corporation (IFC), the investment arm of the World Bank.

The loan package, composed of funds from IFC’s reserves, institutional investors, Nedbank, and Mauritius Commercial Bank, reflects Seacom’s commitment to obtaining the financial backing necessary for its growth initiatives.

Mangale highlighted the importance of strategic funding partnerships, stating, “We see the role of funders to be quite [important] in that context.” He further elaborated on the significance of the IFC deal in accelerating Seacom’s development agenda in Africa, be it through acquisitions, organic growth, or the establishment of strategic infrastructure.

Empowering Africa: Seacom’s unique ownership structure

Founded in 2009, Seacom holds a significant position in Africa’s undersea cable landscape, linking South Africa’s internet traffic to Europe via its eastern African undersea cable.

Privately funded and 75-percent African-owned, the company boasts investors such as Rupert’s investment holding Remgro, holding a 30-percent stake, and Sanlam, a financial services conglomerate owning a 15-percent stake. Africa’s first Black billionaire, Patrice Motsepe, also has indirect exposure through Sanlam’s stake.

Jubilee Holdings, a Kenyan investment holding backed by Aga Khan IV (Shah Karim al-Husayni), holds an 18.8 percent stake in Seacom, further diversifying the company’s ownership structure.

African telecom powerhouse: Seacom’s bold strategy and Africell’s Ugandan assets acquisition

With approximately 25 percent of the local wholesale fiber market, Seacom competes with industry stalwarts like Telkom, Vodacom, and Liquid Intelligent Technologies. Its recent move includes the acquisition of Africell’s Ugandan assets in 2022.

The company’s expansion strategy positions it to navigate the telecommunications landscape, focusing on market penetration and reinforcing its role as a key player in Africa’s evolving connectivity landscape.

Seacom’s strategic acquisitions and robust financial backing underscore its commitment to advancing Africa’s digital infrastructure. As the company expands its footprint in East and West Africa, it remains poised to play a pivotal role in shaping the future of the continent’s telecommunications landscape.