Overhaul of its structure envisioned

TELKOM, taking the next step in a four-year turnaround under chief executive Sipho Maseko, will overhaul its structure to spur profit and may consider offering stock in some of its units in the future. A new holding-company format will give greater autonomy to the four main businesses of South Africa’s former phone monopoly – a retail operation offering landline, wireless and internet services, as well as its IT services, wholesale broadband and real estate divisions – people familiar with the matter said. Pretoria-based Telkom, almost 40 percent owned by the government, could then consider stock market listings or sales of the units, said the people, who asked not to be named because the details aren’t public. Telkom is creating “morefocused business units as well as a more lean and fit-for-purpose strategic corporate centre,” Maseko said, without giving details. While there are no current plans to list any of the businesses, “that could be a consideration in the future,” he said. The shares lost 0.07 percent on the JSE yesterday to close at R73.70, valuing the company at R38.84 billion. Maseko is looking ahead after returning Telkom to profit and overseeing a quintupling in the share price since taking the helm in 2013. The chief executive has built up a mobile-phone business to offset a decline in landline use, and that division reported a maiden profit in the half-year to September. Bloomberg News reported in March that the company planned to spin off the division that holds real estate and its mobile-phone towers. “The objective remains to devolve more autonomy to the business units,” Maseko said. – Bloomberg