Photo by: Bloomberg
State-owned telecommunications services provider Telkom on Monday informed its shareholders that it would grant R1-billion in financial assistance to its subsidiary Business Connexion (BCX).
The information and communication technology (ICT) firm was bought by Telkom for R2.6-billion in 2015, following approval by the Competition Tribunal, the Takeover Regulations Panel and the JSE.
The deal was expected to bolster Telkom’s turnaround and growth aspirations, while improving and enhancing Telkom’s ICT service offering to its customers
Additionally, on Monday, Telkom announced that it would also provide BCX with financial assistance for working capital requirements, settle certain debt commitments and provide funding for future expansion.
Telkom said this was aligned with its strategy of integrating the company’s enterprise business with BCX as the telecommunications services providers “go to market entity”, thereby providing a “truly” converged business offering and end-to-end solutions for its enterprise customers.
Additionally, Telkom would be providing financial assistance of R155-million to Acajou Investments, which is a subsidiary that houses a new venture in digital gaming. Acajou is to be renamed as Digital Gaming League Holdings.
MEASURES TO IMPROVE EFFICIENCY
Meanwhile, Telkom remarked that a centralised group treasury function had been created as it sought to fund group operations and growth “in the most efficient and effective manner”.
The Telkom board confirmed that “immediately after” providing this financial assistance, the company would continue to satisfy the solvency and liquidity test as required in terms of Section 4 of the Companies Act.
The board also confirmed that the terms and conditions of the financial assistance were “fair and reasonable” to the company.