Johannesburg - Telkom executives have met with South African government officials to discuss plans to sell a 39% state-owned stake and were told that potential buyers have been identified.
“They have communicated that they have identified a buyer or buyers to sell to,” Telkom Chief Executive Officer Sipho Maseko said in an interview with Bloomberg in Pretoria on Friday. “The sale will most likely be done through a private placement.”
Finance Minister Malusi Gigaba said last month that he planned to dispose of a portion of the shareholding, currently worth about R10.4bn ($723 million). That would raise money needed to support struggling state-owned companies, including South African Airways.
South Africa has previously approached the Public Investment Corporation (PIC), Africa’s biggest money manager, about buying the shares.
Deputy Finance Minister Sfiso Buthelezi, who is also the chairman of the PIC, said on October 25 that the administrator of government-worker pensions was interested in a deal, while private companies could also look at a purchase. The PIC already owns about 11% of Telkom.
The government has “assured us that the sale will be done in a disciplined manner,” Maseko said.
Uncertainty surrounding the government’s stake has weighed on Telkom’s [JSE:TKG] share price, according to Bruce Main, a money-manager at Ivy Asset Management in Johannesburg. The stock slumped as much as 10% on Friday after the company reported a decline in first-half earnings.
South Africa has been forced to transfer funds to the national airline after creditors including CitiGroup refused to roll over debt repayments. Two years ago, the government sold a stake in Vodacom to the PIC to raise cash for Eskom.
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