Telkom withdraws cautionary – says its not aware of any plans for government to sell
Telkom has withdrawn its cautionary announcement to shareholders, saying that it is not aware of any decision by government to sell its stake in the teclo to pay for SAA’s bailout.
The group published an cautionary announcement in September, telling shareholders that it major shareholder, the South African government, was considering various strategic options to fund a bailout for SAA – of which, partially reducing its current approximate 39% shareholding in Telkom was one.
However, this warning has now been withdrawn.
“Telkom is not aware of any current decision taken by the government with regards to its shareholding,” it said. “Therefore, Telkom is withdrawing the cautionary announcement and caution is no longer required to be exercised when dealing in Telkom’s securities.”
The sale of government’s stake in Telkom was put forward as one of many options to bailout the bankrupt national carrier, which is pegged to receive R10 billion from the state.
Selling state assets has been described by analysts as the ‘best-worst’ route the government could take to fund struggling SOEs without having a major impact on the national budget; however, such a move would also face procedural and regulatory issues, others said.
A major criticism of the possible sale of its stake in Telkom was that government would be selling an asset that was adding revenue to the fiscus each year, to bail out a company that is a net drain.
Treasury has maintained that a Telkom sale was never a given, and was simply one of many options being considered.
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