Telkom, KT to finalise potential JV findings in a few weeks
Talks between JSE-listed telecommunications group Telkom and Korea’s KT Corp appear to be progressing well. In an update to shareholders on Friday, Telkom says a “diagnostic review” is “well progressed” and the two companies expect to finalise their finding within the next few weeks.
KT Corp has expressed an interest in acquiring 20% of Telkom’s equity, a move widely praised by analysts and opposed by trade unions. In terms of the potential deal, Telkom will issue new ordinary shares at an issue price of R36,06/share, diluting government’s shareholding in Telkom from nearly 40% to about 32%.
In December, Telkom entered into a memorandum of understanding with KT Corp in terms of which they agreed to a period of exclusive engagement and information exchange to share areas of mutual strategic and business cooperation.
Following completion of these talks, the companies will present the findings to their respective boards and “engage with key stakeholders before finalising the transaction agreements and presenting the transaction to Telkom shareholders for approval”.
“Shareholders are advised that discussions regarding the potential strategic venture are ongoing and there is still no certainty that a formal transaction will be proposed or concluded.”