Telkom in talks with Korea’s KT

2011-10-14 09:46

South Korean telecom operator KT is in talks on taking a 20% stake in South Africa’s state-owned Telkom as part of a “strategic venture”, Telkom announced today.

The deal “would result in KT Corporation acquiring a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom,” it said in a statement.

Telkom would issue new shares at a price of R36.06, or 12.2% higher than the closing price yesterday on the Johannesburg Stock Exchange, the statement said.

Business Day reported that the deal would be worth R4.6 billion. KT, formerly a state-run fixed-line telephone company, has transformed itself by expanding into new technologies.

Telkom could benefit from that experience as it undergoes a similar transformation. The South African government still holds a 50.7% stake in Telkom.

Faced with stiff competition among mobile and internet companies in South Africa, Telkom has taken a beating as it tries to expand on the rest of the continent, losing $1 billion on its Nigerian venture.

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