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KT Completes Telkom South Africa Due Diligence for Stake

March 28 (Bloomberg) -- KT Corp., South Korea’s largest phone and Internet company, completed due diligence on Telkom South Africa Ltd. last week ahead of a proposed 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. Elyse Lee, a Seoul-based spokeswoman for KT, declined to say when the company expects to close the deal.

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 ($497 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.

Pynee Chetty, a Telkom spokesman in Pretoria, declined to comment as the talks over the stake sale are ongoing.

A review of potential business cooperation and benefits with KT has “been substantially completed,” Telkom said on March 9. “Discussions continue to be positive and collaborative.”

Telkom shares dropped 1.1 percent to 24.33 rand at 1:57 p.m. in Johannesburg. KT was little changed at 32,250 won in Seoul.

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: Kenneth Wong at kwong11@bloomberg.net

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