Government backs out of selling 39% Telkom stake to fund embattled SAA

THE government has backed off from selling its 39% stake at Telkom, amounting to R11.3 billion, to fund SAA.

Telkom announced in the Johannesburg Stock Exchange yesterday its stake was no longer for sale. This comes after almost two months, when Telkom first made the announcement in the JSE, leading to an outcry from opposition parties and civil society.

Finance Minister Malusi Gigaba said two weeks ago they had taken R3bn from the National Revenue Fund to pay Citibank.

Owed billions

Citibank was one of the banks that SAA owed billions of rand to.

In a cautionary announcement in the JSE, Telkom said the government would not sell its 39% stake.

“Telkom is not aware of any current decision by the government with regards to its shareholding. Therefore, Telkom is withdrawing the cautionary announcement and caution is no longer required to be exercised when dealing in Telkom’s securities,” said the company.

SAA has been facing a financial crisis and the R3bn payment by National Treasury staved off the call on government guarantees, amounting to billions of rand.

Other than paying Citibank, the government had earlier paid Standard Chartered Bank R2.2bn.

However, SAA still owed other banks billions of rand, and they extended their loans until certain conditions were met.