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Telkom: Govt not backing KT deal

Jun 01 2012 08:30 Reuters

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VODACOM GROUP LIMITED [JSE:VOD]

Last traded 130.00
Change 1.51
% Change 0.01
Cumulative volume 299967
Market cap 193.43bn

Last Updated: 02/09/2014 at 04:23. Prices are delayed by 15 minutes. Source: McGregor BFA

MTN GROUP LIMITED [JSE:MTN]

Last traded 245.51
Change 3.42
% Change 0.01
Cumulative volume 1129129
Market cap 453.79bn

Last Updated: 02/09/2014 at 04:25. Prices are delayed by 15 minutes. Source: McGregor BFA

TELKOM SA SOC LIMITED [JSE:TKG]

Last traded 60.41
Change 1.94
% Change 0.03
Cumulative volume 778841
Market cap 31.46bn

Last Updated: 02/09/2014 at 04:25. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Telkom [JSE:TKG] said on Friday the government will not back its partnership with KT Corp, a South Korean firm that wants to buy a 20% post-issue stake in the fixed-lined company.

South Korea's No. 2 mobile operator last month cut is offer for the stake by nearly a third, bringing the total sale value down to about R3.3bn.

Telkom, which is majority owned by the South African government, said the proposed deal was presented to cabinet on May 30 and did not get the support it needed.

"Telkom was informed by the Minister of Communications ... that (the) cabinet had taken the decision not to support the transaction as proposed," it said in a statement.

Telkom said it will discuss the implications of the cabinet's decision with the minister.

Battered in recent years by steadily falling fixed-line revenue and expensive blunders in Nigeria, Telkom has been looking to offset shrinking demand for its core business by pushing into new businesses and markets.

The company has also been struggling to keep up with bigger Johannesburg-based African mobile operators MTN Group [JSE:MTN] and Vodacom Group [JSE:VOD].

KT has been scouring for opportunities in Africa, Latin America and Eastern Europe seeking to grow earnings as competition back home heats up.

 
kt corporation  |  telkom
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