“Telkom has been informed by the Honourable Minister of Communications that the proposed transaction between the Companies had been presented to cabinet on 30 May 2012 and that cabinet had taken the decision not to support the transaction as proposed,” the group said in a statement on Friday.
Telkom advised shareholders on 1 June 2012 that the company will be engaging with the Honourable Minister of Communications to discuss cabinet’s decision and the implications thereof.
“This engagement will seek to obtain clarity on the context of the decision given that Korea Telecom, and the transaction, were introduced to Telkom by Government,” it said.
Earlier this month, Telkom announced that it had reached an agreement regarding the terms of a potential strategic venture with KT Corporation, however, at a revised cash issue price due to a decline in its share price.
KT had been set for a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom by way of a specific issue of shares for cash.
In early trade on the JSE, shares in Telkom declined 51 cents, or R2.23 to R22.40.