Telkom’s largest shareholder is taking a wait-and-see approach before commenting further on the proposed takeover of the telephony group by MTN.
The South African government holds a majority share in Telkom, with a 40% stake in the company.
Africa’s largest telecoms group MTN and Telkom on Friday confirmed discussions were under way for the former to take control of the South African telephony group.
Discussions were noted as being at an early stage, with Telkom and MTN saying there is no certainty the transaction will be consummated.
Responding to ITWeb about government’s position in regards to the proposed sale, the Department of Communications and Digital Technologies says: “The minister of communications and digital communications [Khumbudzo Ntshavheni] was informed about the non-binding offer by both Telkom and MTN.
“She was not provided with any details as the parties have only agreed to initiate discussions.
“As the largest shareholder of Telkom on behalf of the SA government, she will receive details of the possible transaction with other shareholders when the discussions are concluded. If there is a need, she will then brief Cabinet. Telkom is a publicly-listed company and its decisions must be approved by its board and shareholders.”
Talks about the potential sale of Telkom have been on-and-off over the last couple of years, with the state also dabbling with the idea a few times.
Government tested the waters back in 2017, saying it would dispose of a portion of its Telkom shares to raise funds to bailout struggling South African Airways.
However, the following year former telecommunications and postal services minister Dr Siyabonga Cwele said government’s plans to sell a portion of its stake in Telkom were no longer an option.
In 2012, Telkom and Korea-based KT Corporation announced they had, in principle, agreed on a per-share price for KT's purchase of a 20% stake in the telecoms operator.
However, government pulled the plug on a proposed strategic transaction between KT and Telkom. At the time, Cabinet said it had taken the decision not to support the transaction as proposed.