Telkom and KT Corp: one year on
Exactly one year after blocking a R3.8-billion deal between Telkom and KT Corp, government is yet to announce an alternative strategy, which cabinet originally called for in June last year.
On the face of it, Telkom’s story reads like Samuel Beckett’s play: “Waiting for Godot” – in which nothing happens.
It is still unclear as to when cabinet is expected to announce a way forward for the struggling telco, with June being a date bandied about the industry.
Telkom’s shares have almost halved since the group was informed that cabinet had taken the decision not to support the transaction with KT Corp, having offered for a 20% stake in the company.
At close of play on the JSE on Wednesday (29 May), shares in Telkom traded at R14.21, down 41.62% from R24.34 a year earlier.
Government is currently the biggest stakeholder in the company through its own 39.8% stake in Telkom, and the 10.5% held by the Public Investment Corporation (PIC).
Daniel Matjila, CIO at the PIC told BusinessTech: “There has been no discussion with government regarding strategy for Telkom. As a listed company we expect Telkom to share information in a fair and transparent manner to all shareholders.”
Earlier this month (May), Telkom appointed current member of the National Planning Commission, Dr Miriam Altman as its head of strategy.
It follows the appointment of Sipho Maseko as Telkom‘s CEO in March, replacing Nombulelo Moholi who announced her resignation in November 2012. The group also restructured its board following a dust-up with the Department of Communications (DoC).
The PIC briefly outlined what it hoped to see from Telkom moving forward. “We would like to see the reconstituted Board, new chairman and new CEO develop and execute on a comprehensive turnaround and growth strategy that will result in improving and bringing sustainable returns to shareholders.
“We expect that such options will be debated by the Board to ensure alignment with Telkom strategy to unlock value and improve shareholder returns,” Matjila said.
Government has made it clear that Telkom is a key and strategic asset in driving the its policy of rolling out broadband, in partnership with the private sector, to all citizens by 2020.
The group is expected to publish its latest set of results in mid June, having advised in April that headline earnings per share for the year ended March 2013 are expected to be at least 20% lower than the 324.7 cents recorded in the prior year.
In 2012, Telkom reported that its HEPS had decreased 33%, while group operating revenue decreased by 0.7% to R33.079 billion.
More on Telkom
Telkom appoints head of strategy
Sipho Maseko the new Telkom CEO
Telkom shuts the door on KT Corp revival talks
Loading ...