Koreans want piece of Telkom

Korea’s leading fixed line and high-speed Internet service provider is making a bid to buy 20% of South Africa’s main fixed line provider, Telkom. The two parties are negotiating a Memorandum of Understanding.

KT Corporation, Korea’s leading fixed line and high-speed Internet service provider, is in talks with Telkom SA Limited about entering into a Memorandum of Understanding regarding a potential strategic venture and acquisition of a stake in Telkom. KT, formerly Korea Telecom, was originally that country’s main public telecoms provider, and has been the major force in transforming it into the world’s leading broadband economy. It aims to acquire 20% of Telkom, which would mean a seat on the board, a role in management and influence on strategic direction. KT Corporation issued the following regulatory announcement in Korea this morning:

“KT Corporation (‚KT‚ ) is in talks with Telkom SA Limited (‚Telkom‚ ) about entering into a Memorandum of Understanding regarding a potential strategic venture and acquisition of a stake in Telkom.

“”Should the two companies reach an agreement, KT would buy Telkom ordinary shares, by way of a specific issue of Telkom shares, at a price of ZAR 36.06 per share, which if implemented would result in KT having a 20% interest in the post-issue ordinary share capital of Telkom (about USD600m).

“”There is no certainty at this stage that these talks between KT and Telkom will lead to a formal transaction and further information will be announced in due course.””

KT describes itself as “”a leading integrated telecommunications service provider in the Republic of Korea””.

The company is active in fixed telephony, mobile, broadband, satellite, and IPTV. KT has a market capitalisation of approximately USD10 billion.

In 2010, KT reached $18.7 billion of operating revenues with earnings before interest, tax, depreciation and amortisation (‚EBITDA‚ ) of $4.7 billion. KT is a market leader in Korea’s fixed and broadband segment with a 86% and 45% market share respectively (19.2m and 7.7m subscribers) and number 2 in the mobile business (32% market share, with approximately 16.8m subscribers).

Additional information about KT can be found by visiting www.kt.com/eng.

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