South Africa: Telkom Share Price Tumbles After $90m Restructuring Bill Announcement
The shares of South Africa’s partly state-owned Telkom tumbled by 16.93 percent on the JSE last week Friday after it announced that the first phase of its restructuring would cost $90 million.
Telkom said that the restructuring - in which some of its employees had opted for voluntary early retirement packages and voluntary severance packages as an alternative to retrenchment - would severely affect its earnings in the 2020 financial year.
In January, Telkom, which is 40 percent state-owned, announced that it had decided to let go of 3000 employees as it battled with high debt and a significant decline in the fixed-voice market due to a tight economy.
Telkom has reportedly lost more than 80 percent of its share value on Friday from where it was a year ago amid an aggressive sell-off by various investors. Telkom is also battling debt of $703 million.
The organiser of the South African Communications Union (SACU), Keith Aimes said that 2100 Telkom employees had agreed to take voluntary severance packages.
Telkom said that the restructuring was because of the shift to fibre and LTE as the new sources of revenue, coupled with the massive decline in its high-margin fixed-voice business, which had severely hurt the group.
Credit: This article originated from www.iol.co.za