Telkom announced on Wednesday that its biggest shareholder, the South African government, may sell its shareholding in South Africa’s largest fixed-line telephone group.
The company informed investors that government is currently considering various strategic options with regards to partially reducing its 39% shareholding in Telkom.
“The implementation of Government’s Telkom proposal may have a material effect on Telkom’s share price,” the company said, advising shareholders to exercise caution when dealing in Telkom’s securities until a further announcement is made in this regard.
SA Govt May Sell Profitable Telkom to ‘Save’ Cash Guzzling SAA
The South African government may sell its profitable Telkom stake to bail out the national carrier, South African Airways (SAA).
Last month, Finance Minister Malusi Gigaba revealed the need to sell state assets in a bid to inject nearly R16 billion into SAA so it can repay loans.
Gigaba revealed that SAA has to pay lenders R15.963 billion in 2017.
South Africa’s Telkom seems to be on everyone’s lips these days. However, for the first time in many years, the conversation is positive.
The stock has risen 264% in past year, giving the company a R34 billion market value.
Its main shareholder, the South African Government, might sell part or all of its 39.3% shareholding in the Telco that generated R3.9 billion in profit in the 2017 financial year.
In 2015, the government sold its 13.91% stake in Vodacom, South Africa’s biggest mobile phone operator by subscribers, to the Public Investment Corporation (PIC) to help fund the R23 billion allocation to the then struggling power utility Eskom.