Telkom explores minority stake sale in fibre arm

Telkom explores minority stake sale in fibre arm

South African operator Telkom said it could put up for sale a minority stake in its core fibre business by March, as the company explores options to improve profits, Reuters reported.

Telkom had explored multiple options to expand its capacity including merging with rival Rain and it was an acquisition target for MTN. Telkom is currently exploring value-creating moves due to operating costs and South Africa enduring an energy crisis.

Telkom is gauging market interest for a minority stake in its fibre business Openserve. Meanwhile, it also exploring offers for its passive infrastructure by next month.

The company has also initiated a cost-saving programme to increase profits which had been impacted by power cuts and higher operating expenses. The operator is aiming over the next 6-18 months to “return to a blended group EBITDA margin of more than 25%."

It is also looking to raise ZAR1 billion (US$56 million) through another sales process but said profitability for Q4 would still be under pressure. Telkom is also looking to let 15% of its 11,898 staff go to save costs.

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