Telkom confirms state sell-off plan
The company tells shareholders the government is considering various strategic options to partially reduce its interest in Telkom
Fixed-line telecommunications service provider Telkom has confirmed speculation that the government is planning to offload part or all of its 39.3% stake in the company.
On Wednesday the company told shareholders the government was now considering various strategic options to partially reduce its interest in Telkom.
The government’s shareholding is valued at about R13bn. Following the announcement, the share price ticked up to close at R62.20.
“The implementation of government’s Telkom proposal may have a material effect on Telkom’s share price,” said the company in a stock exchange announcement. It advised shareholders to exercise caution when dealing in the shares.
The DA’s Alf Lees said the Telkom announcement indicated that Finance Minister Malusi Gigaba was finally talking to Telkom. Lees said he assumed the Telkom shares would be sold to the Public Investment Corporation in a bid to raise the R10bn needed to bail out South African Airways (SAA).
The PIC owns just more than 11% of Telkom.
Lees said it was important to realise that whatever money was raised would not be going into SAA’s coffers but to the banks. “The money has already been thrown into the black hole that is SAA. Whatever is raised from a Telkom sale will have to go to SAA’s banks.”
Last Friday, Gigaba told reporters that the Cabinet would make a final decision on how to recapitalise SAA by the end of September.
“What is a fact is that there is a R10bn capitalisation that is required for SAA, but the source of that recapitalisation is not yet finalised,” said Gigaba. He told reporters the options included public-private partnerships and “a full share swap in regard to the Telkom shares”.
Lees said the total SAA loan amount maturing at the end of September was R6.8bn. “There is next to no hope that any of the lenders will roll over the debt.”