Crisis-hit Telkom dips below R17

Shares in Telkom dipped below R17 in noon trade on the JSE on Thursday (8 November) as investors continued to pull out of the crisis hit firm.

Shortly before 13:00, shares in Telkom declined 22 cents, or 1.28%, to R16.98 on the local bourse, giving the group a market cap of R8.84 billion. Telkom’s share price has declined more than 40% in 2012, alone.

A sell-off was prompted on Monday (5 November) by news of the resignation of Telkom’s CEO Nombulelo Moholi. Shares declined more than 4% following the announcement on SENS.

It also follows a boardroom showdown between the minister of Communications, Dina Pule and a number of exiting executives, at the group’s AGM.

Pule has in recent weeks been more vocal about the government’s role in Telkom, in which is at a 39% stake.

Earlier this year, government, through Cabinet blocked a deal between Telkom, and Korea telecoms firm, KT Corp.

A dealer told BusinessTech that those investors who had been biting the bullet over Telkom, were likely to pull out following Moholi’s resignation.

The dealer said the news of Moholi’s resignation appeared to signal the beginning of the end for Telkom as a private company.

Cabinet tasked minister Pule to report back to it about all the options that were available for Telkom.

Pule recently said that the DoC expected Cabinet to “pronounce” on the options that are available to find a lasting and sustainable solution for Telkom’s turnaround.

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Crisis-hit Telkom dips below R17