KT Completes Telkom South Africa Due Diligence for Stake

KT Corp. (030200), South Korea’s largest phone and Internet company, completed due diligence on Telkom South Africa Ltd. (TKG) last week ahead of a planned stake purchase.

A study that lasted more than two months ended March 23, Seongnam, South Korea-based KT said in an e-mailed response to queries. KT is reviewing a plan to offer Telkom a so-called “managed service,” an outsourcing arrangement under which KT would manage some of the Pretoria-based carrier’s services, according to the e-mail.

KT said in October it plans to acquire about 20 percent of Telkom by buying new shares for 36.06 rand apiece, in a deal valued at about 3.8 billion rand ($500 million). KT is looking for investment opportunities, with a focus on emerging markets such as central America and Africa, after agreeing to sell its 80 percent stake in Russian carrier New Telephone Co., the company said in May.

Negotiations to buy a stake in Telkom are “going well,” KT Chairman Lee Suk Chae said on March 7.

To contact the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net; Sikonathi Mantshantsha in Johannesburg at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Shinhye Kang at skang24@bloomberg.net