Mergers, Acquisitions and Financial Results

The state pension funds administrator Public Investment Commissioners (PIC) yesterday said it was still in talks with Elephant Consortium in a bid to determine how the black economic empowerment consortium would acquire the 15,1% Telkom stake that PIC was warehousing for them.

In November, PIC acquired the stake formerly owned by Telkom's foreign strategic partner Thintana Communications for R6,6bn.

Although the agency paid for the shares, they belong to Elephant Consortium because the group won the right to purchase the stake from Thintana.

The consortium has apparently failed to raise enough cash to acquire the shares on its own.

PIC, which manages nearly R400bn in government employee pension money, bought the shares on behalf of Elephant Consortium and agreed to warehouse them for six months. Any dividend paid during this period will go to PIC.

Elephant Consortium, led by former communications department director-general Andile Ngcaba, is expected to develop a financing structure in the remaining three months to buy the stake from PIC. PIC spokesman Mukoni Ratshitanga yesterday said negotiations between the two parties were continuing, but declined to give details. He said, however, that both parties were working hard to finalise the matter within the stipulated time frame. The PIC has already appointed three directors to the board of Telkom following the acquisition of the stake in the fixed-line phone operator. The three board members replaced the Thintana directors.

PIC head Brian Molefe said recently that the agency would "negotiate in good faith" to facilitate the transfer of shares to Elephant Consortium. Elephant could not be reached for comment yesterday.

Ngcaba said in December that the consortium was in discussions with a number of possible funders.

Business Day