Telkom has not discussed delisting
Telkom says its board has not spoken about delisting, despite discussions by the ruling party, the African National Congress (ANC), to do so.
ANC Treasurer, General Mathews Phosa told Bloomberg on Friday (3 August): “There are discussions about delisting inside the party,” however he would not comment further.
The nationalisation of Telkom was also a topic for discussion during the ANC’s national policy conference held in June.
The government owns 38.9% of Telkom — 51% if the Public Investment Corporation’s stake is included.
Earlier in June, cabinet rejected an offer to acquire 20% of Telkom by Korea-based KT Corp, saying that the company was a “strategic asset” in its plan to roll out Internet to all South Africans by 2020.
Cabinet tasked communications minister, Dina Pule with the job of consulting with the telecommunications incumbent before reporting back to government within three months with a turnaround strategy for Telkom.
The Department of Communications has admitted that nationalisation of Telkom has been mentioned, while Tshediso Matona, the director-general of the Department of Public Enterprises told journalists at state-owned Broadband Infraco’s AGM on Friday (3 August), that nationalisation of Telkom has been taken into consideration.
However, Telkom said in a statement: “The Telkom Board has not discussed delisting.”
Christopher Gilmour, analyst at Absa asset management for private clients, said that government’s plan for Telkom was the $64,000 question. “Telkom’s deal with KT Corp was probably one of the last chances they had to make a serious play in the market,” he said, adding that by blocking the deal, it opened up a case “to say that government may want to delist the thing (Telkom).”
In June, Business Day newspaper reported that government, a top shareholder in Telkom, could delist and nationalise the struggling telecoms operator, 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 business daily quoted the source as saying.
Maqhawe Dlamini, head of equities at the Public Investment Corporation recently told BusinessTech: “The delisting of Telkom was a market rumour based on the subsequent pronouncements by unions against the deal. We are not convinced that it is the intention of government at this stage, seeing that it is yet to consider the full spectrum of strategic options that Telkom will be presenting to them.”
Amid the uncertainty of Telkom’s future, cabinet’s blocking of the KT Corp deal, below par results and no dividend declaration in 2012, shares in Telkom have slumped from a year best of R36.10 at the end of August, to a current price of around R18.30 on the JSE today (6 August 2012).
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