The South African government could delist and renationalise Telkom after deciding earlier this month not to support the sale of a 20% stake in the company to Korean telecoms operator KT Corp.
The delisting and renationalisation of the struggling…
The South African government could delist and renationalise Telkom after deciding earlier this month not to support the sale of a 20% stake in the company to Korean telecoms operator KT Corp.
The delisting and renationalisation of the struggling telecoms operator, in which the government is a major shareholder, are likely to be a key outcome of the ruling African National Congress’ (ANC’s) policy conference next week, according to South African newspaper Business Day.
The paper cited a source close to the department of communications as saying the government is looking for a way to help Telkom achieve its development goals without “being hampered” by Johannesburg Stock Exchange (JSE) rules.
In his view, the rejected KT Corp offer “paves the way” for the government to take outright control of the company.
KT Corp had agreed to pay R2.6bn (US$319m) for the 20% stake and, earlier this month, media quoted senior executive vice president Yung Kim as saying the company was waiting for the South African government to provide more information on why it decided to oppose the deal. Kim reportedly added the company would review any new conditions the government may present before deciding whether or not to resume deal talks.
Following the government’s rejection of the offer, communications minister Dina Pule was quoted as saying KT’s offer was not high enough to help Telkom achieve its targets.
Together with the state-run pension fund, the government owns just over 50% of the telco.
ANC has said it wants 100% of the population to have broadband access by 2030 but, at present, Telkom provides access to just 8%, Business Day reported, referring to company documents.
