Telkom nationalisation on the cards
The government, a top shareholder in Telkom, could delist and nationalise the struggling telecoms operator, Business Day newspaper reported, citing a source close the communication department.
“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 nation’s leading business daily quoted the source as saying.
Shares in Telkom advanced in early trade on the JSE, adding 4.42% to R21.25.
Earlier this month, the government, which together with the state-run pension fund hold over 50% of Telkom, rejected KT Corp’s $385m offer for a stake in the company, saying the firm was a strategic asset in its plan to roll out internet to all South Africans by 2020.
The deal 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 ruling African National Congress view as an arm of government.
The ANC last year tried unsuccessfully to roll back approval for Walmart’s $2.4bn acquisition of retailer Massmart Holdings.
A communication department spokesperson could not be immediately reached for comment.
On Monday, the Communications Workers Union (CWU) has defended Cabinet’s decision to block a deal between Telkom, and Korea-based KT Corp, stating that the telecommunications sector should be under state ownership.
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