Exxaro’s Geoffrey Qhena to take Telkom chair in April

Geoffrey Qhena will take the chair at Telkom from the start of April with the departure of Sello Moloko, whom the Prudential Authority urged to focus on Absa, the telecom company said on Wednesday.

Moloko is set to vacate his board seat on March 31. 

Qhena is a former CEO of the Industrial Development Corp (IDC) where he oversaw asset base soar from R31bn in 2004 to R137bn in 2018 at the time of his departure.

The businessman, who holds an honours degree in accounting science and is a qualified chartered accountant, currently sits on the boards of Investec Bank and Exxaro Resources as non-executive director and chair, respectively. 

Qhena has his work cut out: Telkom shares are trading at R35, less than half their 2019 peak of R96, and the group plans to cut 15% of its workforce — roughly 1,800 jobs — to rein in costs and boost profit. Consultations with unions started earlier this month. 

The partially state-owned operator announced a raft of cost-cutting measures after reporting that earnings for the third quarter to end-December was hit by higher costs and reduced consumer demand in the current inflationary environment, along with increased operating costs due to ongoing power cuts. 

The group is also looking to bulk up its cash position by selling a portion of its device receivables book to financial institutions for R1bn.

Telkom’s overall performance continues to be hit as the group migrates from its fixed-line and voice revenue businesses that have been declining in recent years as consumers increasingly opt for fibre technology.

The telecom industry worldwide has been experiencing a wave of consolidation to better manage the costs of building expensive infrastructure, and local players are no exception.

Telkom has been the subject of three separate bids in the past year, including a proposed takeover by MTN and a merger with Rain, indicating that its assets are highly valued even as the group battles to realise their full value.

Its prized fibre business is set to welcome a minority partner after the company opened the door on bids for Openserve.

“The Telkom board extends its gratitude to the outgoing chairperson, Mr Moloko, who effectively managed the organisation’s leadership transition and the uncertainties of operating through the Covid-19 pandemic,” the group said in a statement.

Qhena will also chair the group’s nominations committee and be a member of its remuneration committee.

gavazam@businesslive.co.za