Telkom deal to buy Broadband Infraco collapses

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Talks by South Africa’s Telkom to buy Broadband Infraco has collapsed, ending attempts by the country’s biggest fixed-line telephone group to goggle up the state-owned telecoms infrastructure firm.

 

Techcentral reported that the parties could not agree on price after Telkom completed a due diligence of Infraco.

Citing well-placed sources, Techcentral said Telkom offered to pay R1 for the troubled company, while Infraco was apparently seeking “several hundred million rand” for the deal to proceed.

Telkom spokeswoman Jacqui O’Sullivan said in a brief written statement in response to questions from TechCentral: “While there have been discussions … [the] parties could not reach agreement on various matters.”

Business Day reported in April that Broadband Infraco supported the government’s plan to merge it with Telkom, and believes it should receive state assistance as soon as possible to prevent further erosion of its value.

The newspaper said the company lost R245 million in 2014-15, compared to the previous R144 million loss on revenue of R366 million (R302 million).

According to the integrated report cited by Business Day, Broadband Infraco had applied for a recapitalisation of R3.4 billion over the medium-term expenditure framework, as well as a R698 million government guarantee. However, this was substantially trimmed down in the corporate plan, which noted that R90 million was needed for the company’s short-term cash and working capital requirements.

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