Cabinet has decided against supporting a potential strategic venture between Telkom and Korean group KT Corporation, Telkom disclosed on Friday.
It said the Minister of Communications had informed the telecommunications operator on Thursday that the proposed transaction between the companies had been presented to Cabinet on 30 May 2012 and that Cabinet had taken the decision not to support the transaction as proposed.
“The board of directors of Telkom will be engaging with the Honourable Minister of Communications to discuss Cabinet's decision and the implications thereof. A further announcement will be made in due course,” Telkom said.
The group announced on May 8 that the two companies had reached in principle agreement regarding the terms of the Potential Strategic Venture, subject to the fulfilment of certain pre-conditions, “including receipt of in principle support for the Potential Strategic Venture by the Government of South Africa”.
Should the venture be implemented, it would result in KT acquiring a strategic equity shareholding of 20% in Telkom and the companies entering into a five-year co-source management services agreement to formalise the relationship and identified areas of mutual strategic and business cooperation. - I-Net Bridge