Swiftnet invitation to close

By Damaria Senne for Telkom
Johannesburg, 17 Jul 2006

Black economic empowerment (BEE) investors, who wish to bid for the 30% equity stake in Telkom`s wholly-owned subsidiary, Swiftnet, have until Friday to submit expressions of interest (EOI).

Earlier this month, Telkom renewed its push for an empowerment partner for Swiftnet, following two failed attempts.

Swiftnet`s wireless data licence, issued by the Independent Communications Authority of SA (ICASA), requires a minimum of 30% of its shareholding be held by a BEE partner. However, Telkom has been unable to fulfil this requirement since 2001 when it purchased the 40% stake held by BEE partner VHR Wireless, giving the operator full ownership.

Owing to non-disclosure agreements with previous bidders, Telkom cannot discuss the reasons for the earlier bids being unsuccessful, says acting Swiftnet CEO Rikus Matthyser.

However, ICASA`s telecoms enforcement manager, Lee-Ann Cassie, says Telkom informed the regulator it was not getting offers that were credible enough.

Doing things differently

An advertisement published in a national daily newspaper earlier this month stated prospective bidders should declare and provide proof of their source of funding, and pay a non-refundable deposit of R25 000. Telkom also requires bidders to demonstrate what skills they bring to the table.

In an attempt to ensure this bid for a BEE partner is successful, Matthyser says this time, prospective bidders will be provided with sufficient information of the business and industry.

Significant issues will be highlighted which bidders should factor into their independent valuations of the shares they are bidding for, he says.

He also notes that if there is a gap between Telkom and the bidder`s valuation, the gap could be reduced during negotiations.

All EOIs are to be forwarded to Andre Geldenhuys or Vusi Riba, Nedbank Corporate Finance, at (011) 295-8602. The closing date for final bidding is 7 August.