By Lehlohonolo Lehana.
Mobile operator Telkom shares rose 7% on Monday following reports of possible bid by Public Investment Corporation (PIC) for a large stake either in it or its assets.
PIC – which invests retirement funds on behalf of South African civil servants – is backing a possible bid by former Telkom CEO Sipho Maseko for the 35% stake, worth about R4.5-billion at the current share price.
Maseko, who took the reins at Telkom in April 2013 and who led several big restructurings at the group, stepped down in December 2021, making way for his successor, Serame Taukobong.
Telkom’s share price has come under considerable pressure this year amid a R13-billion write-down in assets and a decision by rival MTN Group to walk away from talks to acquire the company.
The PIC is in discussions with Maseko’s investment vehicle, AfriFund, and Mauritius-based Axian Telecom regarding the potential offer.
The 35% stake could be combined with the PIC’s current shareholding to boost the overall holding of the group. The PIC holds 13.4% of Telkom’s equity, while the government owns 40.5% of the operator directly.
Earlier in May, Telkom’s shares had crashed by double digits after it warned investors that its shift to its new digital strategy, as well as plans to cut as much as 15% of its workforce, would prompt more than R1 billion in retrenchment-related costs and R13 billion in writedowns of various business units in its year to end-March.
Telkom has been struggling under the weight of a debt pile that stood at a net R16.3 billion at the end of September and in October MTN had walked away from takeover talks amid a citing a lack of exclusivity, while talks with data-only operator Rain were called off in January.