Sale of state Telkom stake unlikely to hit operations, says CEO Maseko
The state’s proposed sale of its stake in fixed-line group Telkom will probably not affect operations, says CEO Sipho Maseko.
The government owns 39% of Telkom and was said to be considering selling the shares to bail out troubled South African Airways (SAA). Its stake in Telkom is worth about R14bn.
Asked whether Telkom would consider a stock buy-back, Maseko said Telkom would consider its options, including a buy-back, once there was a formal process. It emerged in Parliament on Wednesday that the state sees the sale of noncore assets as the only sustainable way to support SAA.
Responding to questions from opposition parties, Deputy President Cyril Ramaphosa said the government continued to discuss which assets were strategic. "If that proposition [selling the Telkom stake] comes up, Parliament will deal with it," said Ramaphosa.
Telkom management, led by Maseko, had substantially reduced costs, which were a drain on the group. The business recorded improved performance in the year to June.
Although the core fixed-line voice business is facing pressure, it has experienced a strong uptake in data services.
Telkom’s share price has fallen 10% since January.
The group is entering a new phase it believes will unlock shareholder value. This includes adding a new unit, called Gyro, which will house its multibillion-rand property portfolio including vacant land, office blocks and mast towers.