Telkom stake part sale is back on the agenda
The sale of a portion of the government’s stake in Telkom is back on the agenda, says Finance Minister Malusi Gigaba, and several buyers have approached the government with offers.
While the government had previously indicated that it intended to sell its 39% stake, valued at about R13bn, it is now looking to cover only the cost of the recapitalisation of the South African Post Office, which received a transfer of R3.7bn in October.
The R10bn that is being paid over to South African Airways (SAA) — and initially was taken out of the National Revenue Fund — has been covered by the contingency reserve, says Gigaba, hence it was just the transfer to the Post Office that caused the breach of the government’s self-imposed expenditure ceiling.
Last week in Parliament, however, SAA chairman Bhekumuzi Magwaza said the airline needed another R10bn before it could effect a turnaround. Even though the Treasury had promised another R3bn, which would have been paid in 2019-20, Gigaba says it may now be necessary for SAA to find alternative sources of funding. “We will have to find another way of funding their future needs.”
The expected announcement of a new board for Eskom at the end of this week is of enormous importance, says Gigaba. “The reason the big lenders like Citibank and Standard Chartered called their loans was because of serious concerns over governance problems. There are also concerns about the executive directors and the numerous acting appointments at Eskom. It needs a credible board and executives to restructure the finances and decrease debt to strengthen the balance sheet.”