{"id":14641,"date":"2012-06-06T15:04:08","date_gmt":"2012-06-06T13:04:08","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=14641"},"modified":"2012-06-06T16:38:15","modified_gmt":"2012-06-06T14:38:15","slug":"kt-offer-too-low-for-telkoms-needs-pule","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/14641\/kt-offer-too-low-for-telkoms-needs-pule\/","title":{"rendered":"KT offer too low for Telkom\u2019s needs: Pule"},"content":{"rendered":"

Communications Minister Dina Pule<\/a> says that Korea telecommunications group KT Corp\u2019s<\/a> offer for a 20% stake in Telkom<\/a> was too low to meet the group\u2019s needs.<\/p>\n

On Friday (1 June), SA\u2019s cabinet blocked a deal between Telkom and KT Corp.<\/p>\n

Minister Pule said that Telkom SA may sell stock to existing shareholders or raise debt to help fund a return to profit, Bloomberg reported.<\/p>\n

In early May, KT Corp revised its offer for 20% in the SA telecoms firm to R25.60 rand a share, from an initial price of R36.06 a share in October 2011.<\/p>\n

“We don’t know what conditions Telkom want,” Yung Kim, senior executive vice president at KT, told Reuters. “We will review new conditions if they are offered.”<\/p>\n

A KT spokesman said the company was open to further negotiations with Telkom.<\/p>\n

Government owns 39.8% of Telkom, while the Public Investment Corp<\/a>, which invests state employees\u2019 pensions, holds a 10.9% stake in Telkom.<\/p>\n

Shares in Telkom have slipped from R37 to a current offering of R20.32 in the last year, while its market cap has declined over the same period from R19.5 billion to R10.5 billion.<\/p>\n

\u201cWhen you negotiate a deal you want the best outcome for yourself,\u201d said Pule. \u201cTelkom must inform government of its funding needs so a solution can be found,\u201d she told Bloomberg.<\/p>\n

Cabinet asked minister Pule to report back about all the options that are available for Telkom in three months\u2019 time.<\/p>\n

In a statement of its own, the\u00a0Department of Communications (DoC)<\/a> said: \u201cIn considering the proposed deal between Telkom and South Korea\u2019s KT Corporation, cabinet took into account the fact that the Department of Communications is driving the government policy of rolling out broadband, in partnership with the private sector, to all citizens by 2020.<\/p>\n

\u201cTelkom is a key and strategic asset in the rollout of this telecommunications infrastructure and in the effort to improve the skills of our citizens. Government recognize the need for Telkom to implement an urgent turn-around strategy, and to get the company back on its critical centre of delivering ICT services to all South Africans, new options will be considered by both Telkom and government in this regard,\u201d the DoC said.<\/p>\n

To compound its misery, on Monday (4 June) Telkom revised its expected earnings in a trading statement for the year ended March 2012, saying that basic earnings per share from continuing operations are expected to be between 95% and 100% lower than the comparative period.<\/p>\n

In March, Telkom had warned shareholders that it expected basic and headline earnings per share from continuing operations to be at least 90% and 25% lower than the previous year, respectively.<\/p>\n

The group will publish its financial results on Friday 8 June.<\/p>\n

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

Telkom set for lengthy wait on KT future<\/a><\/p>\n

Telkom lowers expected earnings<\/a><\/p>\n

Telkom deal with KT Corp not off the table: PIC<\/a><\/p>\n

Telkom shares tank on KT Corp deal block<\/a><\/p>\n

Telkom, Korea Telecom transaction not going ahead<\/a><\/p>\n

Telkom shares slump 5% as investors seek KT Corp clarity<\/a><\/p>\n

Telkom agrees KT Corp deal at cut price<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Communications Minister Dina Pule says that Korea telecommunications group KT Corp\u2019s offer for a 20% stake in Telkom was too low to meet the group\u2019s needs.<\/p>\n","protected":false},"author":9,"featured_media":9962,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[1087,1083,1444,26,1781,65],"class_list":["post-14641","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-department-of-communications","tag-dina-pule","tag-doc","tag-headline","tag-kt-corp","tag-telkom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/14641","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=14641"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/14641\/revisions"}],"predecessor-version":[{"id":14663,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/14641\/revisions\/14663"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/9962"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=14641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=14641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=14641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}