The head of South Africa’s phone utility Telkom said that a planned listing of 20% of the operator must go ahead despite poor global market conditions.
”There is always going to be a question of when the market conditions will improve and I really think there is a need to do it,” chief executive officer Sizwe Nxasana told the country’s Business Day newspaper in an interview.
There has been speculation that the initial public offering — which would be the biggest privatisation in South Africa so far — might not take place by March as scheduled because of the impact of weak stock markets on Telkom’s valuation.
The listing has already been postponed by a year because of global market volatility and analysts say further delays would raise concerns over the country’s commitment to privatisation and dent foreign confidence in South African assets.
The IPO is expected to raise around R10-billion.
But Nxasana said that he believed there was enough money in the South African market to make the offering a success, regardless of foreign demand.
”There is enough local appetite for an (initial public offer) because investors believe Telkom as a group will offer good returns, strong profits and strong cash flow,” he said.
Business Day also said that US based telecommunications giant AT&T was dropping its legal action against Telkom after the parastatal agreed to fulfil a backlog of bandwidth orders.
Nxsasana told the newspaper he was circumspect about the out-of-court agreement.
”Without prejudicing our rights we will provide those facilities which we believe are in order,” he said.
Executives from Telkom and AT&T could not immediately be reached for comment. – Reuters