Telkom issues cautionary over possible government sale

Telkom has issued a cautionary statement to its shareholders, warning that the South African government is considering reducing its 39% holding in the company.

“Shareholders are advised that Telkom’s major shareholder, the Government of South Africa, is currently considering various strategic options with regards to partially reducing its current approximate 39% shareholding in Telkom,” it said.

“The implementation of government’s Telkom proposal may have a material effect on Telkom’s share price. Accordingly, shareholders are advised to exercise caution when dealing in Telkom’s securities until a further announcement is made in this regard.”

The sale of the government’s stake in Telkom may take place as part of a plan to bail out SAA, which is set to receive R10 billion from the state.

The sale of Telkom’s shares may not be enough to pay SAA’s debt, however, said DA MP Alf Lees.

“A fire sale of these Telkom shares would likely result in a significant discount and thus on their own will not meet the full cost of recapitalising SAA,” he said.

“Other assets will have to be sold.”

Now read: Finance Minister in discussions to sell Telkom stake

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Telkom issues cautionary over possible government sale