S.Africa's Telkom in talks with S.Korea's KT on 20% stake
South Korean telecom operator KT is in talks on taking a 20 percent stake in South Africa's state-owned Telkom as part of a "strategic venture", Telkom announced Friday.
The deal "would result in KT Corporation acquiring a strategic equity shareholding of 20 percent in the post-issue ordinary share capital of Telkom," it said in a statement.
Telkom would issue new shares at a price of 36.06 rands, or 12.2 percent higher than the closing price Thursday on the Johannesburg exchange, the statement said.
Business Day newspaper said the deal would be worth 4.6 billion rands ($581.7 million, 425 million euros).
KT, formerly a state-run fixed-line telephone company, has transformed itself by expanding into new technologies. Telkom could benefit from that experience as it undergoes a similar transformation. The South African government still holds a 50.7 percent stake in Telkom.
Faced with stiff competition among mobile and Internet companies in South Africa, Telkom has taken a beating as it tries to expand on the rest of the continent, losing $1 billion on its Nigerian venture.
© 2011 AFP