(Adds details)
* Says cabinet not backing deal as proposed
* Says to discuss implications with minister
JOHANNESBURG, June 1 (Reuters) – South Africa’s Telkom
said on Friday the government will not back its
partnership with KT Corp, a South Korean firm that
wants to buy a 20 percent post-issue stake in the fixed-lined
company.
South Korea’s No. 2 mobile operator last month cut is offer
for the stake by nearly a third, bringing the total sale value
down to about 3.3 billion rand ($385.46 million).
Telkom, which is majority owned by the South African
government, said the proposed deal was presented to cabinet on
May 30 and did not get the support it needed.
“Telkom was informed by the Minister of Communications …
that (the) cabinet had taken the decision not to support the
transaction as proposed,” it said in a statement.
Telkom said it will discuss the implications of the
cabinet’s decision with the minister.
Battered in recent years by steadily falling fixed-line
revenue and expensive blunders in Nigeria, Telkom has been
looking to offset shrinking demand for its core business by
pushing into new businesses and markets.
The company has also been struggling to keep up with bigger
Johannesburg-based African mobile operators MTN and
Vodacom.
KT has been scouring for opportunities in Africa, Latin
America and Eastern Europe seeking to grow earnings as
competition back home heats up.
($1 = 8.5613 South African rand)
(Reporting by Olivia Kumwenda)
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