Johannesburg - Telkom [JSE:TKG] shares surged nearly 8% in
early trade on Tuesday after a report said its top shareholder, the South
African government, could be planning to buy the outstanding stock in the
Telkom, in which the government owns more than a 50% stake
jointly with the state-run pension fund, was up 3.8% at R21.14 by 09:53 GMT, on
track for its biggest percentage gain in more than three months.
Citing a source close to the communication ministry, South
Africa’s leading financial daily Business Day said the government could fully
nationalise Africa’s biggest fixed-line phone operator.
“The government is looking for a way to direct Telkom to
meet its development agenda without being hampered by the rules of the JSE,”
the daily quoted the source as saying, referring to the Johannesburg Stock
Siya Qoza, a spokesperson for the communication ministry,
said the Business Day report was “not close to the truth” but added the ANC was
best placed to comment.
“I don’t know what they want to do with Telkom but as far as
I know it’s not government policy,” Qoza said.
ANC spokesperson Jackson Mthembu said: “I am not aware of
Telkom being in any policy documents but anything is possible at the policy
The ANC has a major policy meeting next week and has been pushing
for greater state control over Africa's largest economy.
Earlier this month, the cabinet turned down KT Corp's $385m offer for a stake in the company,
saying it was a strategic asset in its plan to roll out internet services to
all South Africans by 2020.
The deal with the South Korean firm would have diluted the
government holding to less than 50%.
Analysts have said the rejection of KT’s offer underscored
the apparent determination of the government not to cede control of a company
that many in the ANC view as an arm of government.
The ANC last year tried unsuccessfully to roll back approval
for Walmart Stores's $2.4bn acquisition of retailer Massmart Holdings
Telkom, which last week posted a one-third drop in full-year
profit and suspended dividend payments for first time since 2003, has been hit
by hefty start-up costs at its new mobile arm and falling sales from its
mainstay fixed-line phone business.