Johannesburg, 06 Jul 2006
Telkom has issued an invitation for bids for a 30% equity stake in its wholly-owned subsidiary Swiftnet, following a failed attempt earlier this year to find a black economic empowerment (BEE) partner for the company.
In January, a Telkom spokesperson said negotiations between the fixed-line operator and two companies seeking to acquire the Swiftnet stake had fallen through, and added the company was still looking for a suitable empowerment partner.
Lee-Ann Cassie, a telecoms enforcement manager for the Independent Communication Authority of SA (ICASA), says Swiftnet`s wireless data licence requires a minimum of 30% of its shareholding be held by a BEE partner.
Swiftnet has been unable to fulfil this requirement since 2001, she notes, although efforts have been made by Telkom to address the issue.
In its latest attempt to fulfil Swiftnet`s licence obligations, Telkom yesterday called for expressions of interest from potential investors, the closing date for which is 7 August.
Hurdles
At the time of licensing Swiftnet, the BEE shareholding was held by VHR Wireless, Cassie notes. However, VHR Wireless was unable to meet its shareholding obligations and, in 2001, Telkom bought the remaining 40% in Swiftnet, giving the operator full ownership.
Since then, Telkom has indicated to ICASA its interest in acquiring another BEE partner, but said the delay in concluding an empowerment deal was because it was not receiving offers from investors who were credible enough.
Secondly, the bidding process is long, as it has to fulfil government`s acquisition protocol due to government`s stake in Telkom, says Cassie.
As a potential option to attract more credible investors, ICASA has proposed Swiftnet`s licence conditions be amended so a bigger stake would be required to go to a BEE partner than the current 30%. However, Cassie would not commit to a figure.
Telkom was unable to provide comment by the time of publication.
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Telkom subsidiary 'still seeks` BEE partner
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