Telkom issues warning over possible government sale
Telkom has issued a cautionary statement to its shareholders, warning that the South African government is considering plans to partially reduce its 39% holding in the company.
“Shareholders are advised that Telkom’s major shareholder, the Government of the Republic of South Africa, is currently considering various strategic options with regards to partially reducing its current approximate 39% shareholding in Telkom,” the company said in a statement on Wednesday.
“The implementation of government’s Telkom proposal may have a material effect on Telkom’s share price. Accordingly, shareholders are advised to exercise caution when dealing in Telkom’s securities until a further announcement is made in this regard.”
The sale of government’s stake in Telkom has been put on the cards as on option of bailing out bankrupt national carrier South African Airways, which is pegged to receive R10 billion from the state.
However, the sale of Telkom’s shares still may not be enough to pay SAA’s crippling debt, said Democratic Alliance MP, Alf Lees.
“A fire sale of these Telkom shares would likely result in a significant discount and thus on their own will not meet the full cost of recapitalising SAA,” he said.
“Other assets will have to be sold, even if the asset sales are spread out to minimise discounts.”
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