South African Post Office. (Duncan Alfreds, Fin24)
Pretoria - Government may dispose of a portion of its “well-performing” shares in fixed and mobile operator Telkom in efforts to avoid a R3.9bn expenditure ceiling breach.
Government’s share in Telkom is estimated to be worth between R14bn and R20bn.
Finance Minister Malusi Gigaba said on Wednesday in his maiden Medium-term Budget Policy Statement (MTBPS) the expenditure ceiling could be breached by R3.9bn in the current year, as a result of government’s recapitalisation of South African Airways (SAA) and the South African Post Office (SAPO).
“We aim to avoid a breach of the expenditure ceiling this year through the disposal of assets,” Gigaba said during his mini budget speech.
Gigaba added that the Telkom shares would be sold with an option to buy back at a later stage.
“Additional appropriations to recapitalise SAA and SAPO have been partially offset by use of the contingency reserve,” he said.
An additional R3.7bn had been allocated for the recapitalisation of SAPO.
“We are finalising draft legislation to enable the Postbank to receive a banking license,” Gigaba said.
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