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Telkom 'needs skills, not foreign money'

Jul 17 2012 10:52

Company Data

TELKOM SA SOC LIMITED [JSE:TKG]

Last traded 66
Change 2
% Change 3
Cumulative volume 1419590
Market cap 0

Last Updated: 22-07-2016 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Telecommunications group Telkom [JSE:TKG] requires “skills and competency” to implement a turnaround plan, not foreign investment, Communications Minister Dina Pule said in a report on Engineering News on Monday.

Responding to parliamentary questions on cabinet’s decision to halt a proposed deal between South Korean telecommunications group KT Corp and Telkom earlier this year, Pule said that Telkom needed to find the “best and most suitable” solution to its current challenges.

KT Corp intended to buy a 20% stake in Telkom for R2.6bn.

The South African government, Telkom’s top shareholder, rejected KT Corp's R3.3bn offer for a 20% stake in the telecoms firm last month, potentially scuppering the South Korean firm’s first foray into fast-growing Africa.

Had the venture been implemented‚ it would have resulted in KT acquiring a strategic equity shareholding of 20% in Telkom with the companies entering into a five-year co-source management services agreement to formalise the relationship and identify areas of mutual strategic and business co-operation.

Pule said earlier that Telkom was a strategic asset in the roll-out of South Africa’s 2020 broadband aims, but the group needed to “get back to its critical centre”.

She noted that Telkom was also key in government’s efforts to improve the skills of South Africa’s citizens.

The Department of Communications was undertaking assessments of all possible options available to Telkom and would report back to Cabinet in about two months.

It had been reported that the government plans to delist and nationalise the embattled operator, but the reports have not yet been confirmed.

On Friday, Telkom withdrew its cautionary announcement on the JSE, signalling an official end to talks with KT Corp.

Telkom shares were down on Tuesday morning, trading at R18.10 on the JSE.

 
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