Telkom sells the house

Posted On Tuesday, 03 September 2002 10:01 Published by
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Telkom this weekend started a bidding process in which it hopes to sell off the bulk of the property it owns outright and lease it back again in 10- to 15-year periods.
[Johannesburg, 2 September 2002] - Telkom this weekend started a bidding process in which it hopes to sell off the bulk of the property it owns outright and lease it back again in 10- to 15-year periods.

Although the company will not put a value on the properties under consideration, interested companies will have to cough up R50 000 in a non-refundable fee to receive an information memorandum on the deal.

The company says 1 427 sites are to be sold, ranging from the warehouses and exchange buildings around the country to the R100 million national network operations centre the company recently built in Centurion, Pretoria.

“It represents the bulk, by value, of our property portfolio,” says Belinda Williams of the company's investor relations divisions.

Telkom says the sale is standard business practice and will allow it to focus on its core business. “The sale is intended to unlock the inherent value of the portfolio and is in line with international best practice,” says CEO Sizwe Nxasana in a statement.

The large cash inflow expected from the deal will most likely be used for debt repayment. Its debt stands at about R24 billion.

In 2000, Telkom concluded an outsourcing agreement on the management of its property and facilities with a consortium that includes the JSE-listed Rebhold group. At the time, the deal was valued at R1.5 billion a year.

Submissions by interested companies and consortia will be accepted until 11 October and the company hopes to conclude the sales before it is listed in the first quarter of next year. However, a delay in finalising the sales would not be expected to delay the planned listing.

Investors will be evaluated against their commercial experience, black economic empowerment standing and willingness to comply with Telkom's legal requirements, among other criteria.


Publisher: IT Web
Source: Phillip de Wet - IT Web News Editor

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