{"id":11828,"date":"2012-05-08T09:41:17","date_gmt":"2012-05-08T07:41:17","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=11828"},"modified":"2012-05-08T10:13:46","modified_gmt":"2012-05-08T08:13:46","slug":"telkom-agrees-kt-corp-deal-at-cut-price","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/11828\/telkom-agrees-kt-corp-deal-at-cut-price\/","title":{"rendered":"Telkom agrees KT Corp deal at cut price"},"content":{"rendered":"

Telkom<\/a> said on Tuesday (8, May 2012) that it has reached an in principle agreement regarding the terms of a potential strategic venture with Korea Telecom (KT) Corporation<\/a>, which includes a revised cash issue price due to a decline in the group\u2019s share price.<\/p>\n

KT is acquiring 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.<\/p>\n

Telkom said that the deal would include a revised cash issue price for the new Telkom ordinary shares to be issued to KT.<\/p>\n

\u201cSince the first cautionary announcement on 14 October 2011, there have been a number of developments concerning Telkom that have materially impacted the Telkom share price. As a consequence, Telkom and KT have agreed to revisit the terms of the Potential Equity Investment,\u201d Telkom said in a statement on Tuesday.<\/p>\n

\u201cShareholders are advised that Telkom and KT have agreed to a revised cash issue price for the new Telkom ordinary shares to be issued to KT under the Potential Equity Investment of ZAR25.60 per new Telkom ordinary share,\u201d it said.<\/p>\n

The proposed issue price represents a 9.9% premium to the closing price of Telkom ordinary shares of ZAR23.30 on the securities exchange operated by JSE Limited<\/a> on 4 May 2012 and a 7.1% premium to the volume weighted average price of Telkom ordinary shares for the 30 trading days up to and including 4 May 2012.<\/p>\n

Telkom further noted that, in the event that it declares and\/or pays any distribution to Telkom shareholders prior to the implementation of the venture, the aggregate subscription price payable by KT will be reduced by 20% of the total gross distribution declared and\/or paid by Telkom.<\/p>\n

The SA firm said in October that, should the two companies reach an agreement, KT would buy Telkom ordinary shares, by way of a specific issue of Telkom shares, at a price of R36.06 per share \u2013 which if implemented, would result in KT having a 20% interest in the post-issue ordinary share capital of Telkom, worth about US$600 million (R4.7bn).<\/p>\n

If implemented, the strategic venture would see the companies entering into a 5-year co-source management services agreement to formalise the relationship and identified areas of mutual strategic and business cooperation.<\/p>\n

The proposed strategic venture remains subject to the fulfilment of a number of pre-conditions before the final terms can be finalised, Telkom said.<\/p>\n

KT Corp is a market leader in the Republic of Korea\u2019s fixed and broadband segment with an 86% and 45% market share respectively, and number two in the mobile business (32% market share, with approximately 16.8m subscribers).<\/p>\n

In early trade on the JSE, shares in Telkom were relatively static, up six cents to R23.37 having traded at\u00a0R34.50 when the deal was originally announced in October last year.<\/p>\n

Related articles<\/strong><\/p>\n

Telkom shares rise 3.3% on KT Corp headway<\/strong><\/a><\/p>\n

Telkom and KT finalise terms of partnership<\/strong><\/a><\/p>\n

Telkom share price tanks after lower profit forecast<\/a><\/strong><\/p>\n

Telkom says KT Corp discussions \u2018positive\u2019<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Telkom says that it has reached an in principle agreement regarding the terms of a potential strategic venture with KT Corp, which includes a revised cash issue price due to a decline in the group\u2019s share price.<\/p>\n","protected":false},"author":9,"featured_media":4810,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[26,1665,1781,65],"class_list":["post-11828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-headline","tag-korea-telecom","tag-kt-corp","tag-telkom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=11828"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11828\/revisions"}],"predecessor-version":[{"id":11831,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11828\/revisions\/11831"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/4810"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=11828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=11828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=11828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}