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Government sale could hit share price, Telkom warns

Shareholders advised to ‘exercise caution’.

Telkom on Wednesday cautioned shareholders that a possible plan by government to offload some or all of its 39.3% stake in the telecommunications operator could hit its share price.

“Shareholders are advised that Telkom’s major shareholder, the government of the Republic of South Africa, is currently considering various strategic options with regards to partially reducing its current approximate 39% shareholding in Telkom,” it said on the JSE’s stock exchange news service.

“The implementation of government’s Telkom proposal may have a material effect on Telkom’s share price. Accordingly, shareholders are advised to exercise caution when dealing in Telkom’s securities until a further announcement is made in this regard.”

Last week, a cabinet document leaked to the Democratic Alliance suggested that finance minister Malusi Gigaba is considering selling a big chunk or possibly all of government’s stake in Telkom to plug a R10bn-plus hole in the finances of South African Airways.

Telkom was quoted shortly after 10am trading at R62.82/share, up 2.7% on the session. Since the beginning of the year, the counter has shed 15.1% of its value.

Government’s stake in Telkom is currently valued at R13 billion.  — (c) 2017 NewsCentral Media

This article was originally published on TechCentral here

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CEO Sipho Maseko turned around Telkom over the last 5 years. The current PE and div yield is very attractive and therefor PIC will buy most if not all of government’s stake in Telkom.

In 2008 telkom share price was trading around R170 and has subsequently fallen as a result normal economic cycles, pathetic business sense and obviously, by the constant inference by the anc and its influence over its management. Notwithstanding that telkom was a state owned enterprise which was privatized making some anc mps overnight multi millionaires. The problem here is that telkom shares held by government is an asset of the the republic of south africa and therefore its citizens and not the bailout fund for gigaba. The Da and other shareholders should seek a court interdict to prevent gigaba from selling these shares coz he is selling them under “duress or undue pressure” which is not in the best interest of parties concerned. This is akin to an asset being sold for far less than its actual value because the seller is desperate. That’s why the share price will be materially effected – negatively. These shares should only be sold once a return on investment has been realized. That was the whole point of having the investment in telkom. Once again ordinary south african’s get a raw deal from its democratically elected government.

The government’s stupid move to sell Telkom shares, to save SAA which is ultimately going to fail; will affect the share price for the better. Offloading the entire 39% of Telkom stake means that the government will not have a direct say-so and or direct board represention. And hopefully, it may unwittingly, in so doing get rid of board members who are on the Guptas payroll undetected. I bet the share price will improve, I can’t wait. It is the ultimate stupid move, but no one can accuse the ruling party of anything other than.

yes,the government gets about R 950 million every year from Telkom dividends. Now they want to sell a good company and invest in “shheet”
what more can one say? and they think they are clever.

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