The government is already Telkom’s largest shareholder, and Reuters reports the company’s shares surged by 8% on the back of the news. Local newspaper reports suggest the government is looking for ways the company can meet its development agenda “without being hampered by the rules of the Johannesburg Stock Exchange”, said a source close to the communications department.
Together with the state run pension fund, the government already owns over 50% of South Africa’s largest fixed line operator. The cabinet has rejected Korea Telecom’s bid of $385 million for a stake in the company earlier this month, stating Telkom was a key strategic asset to rolling out internet to all South Africans by 2020. If the deal had gone through it would have the left the government with a 20% stake.
South Africa’s ruling party, the African National Congress (ANC) has a policy meeting next week where Telkom SA’s situation could me made clearer.
