SA Telkom buys back own shares

JOHANNESBURG – South African telecoms group Telkom bought back four per cent of its own shares for 1,71 billion rand between March and September, the company said yesterday.

The fixed-line monopoly said it funded the share buyback from available cash resources. The shares were bought back by Telkom subsidiaries and were being held as treasury stock in these companies.Analysts said the share buyback was positive for the group as it enhanced earnings and reduced the risk of a share overhang resulting from major stakeholder Thintana selling half of its stake in Telkom in July.Telkom said the buyback of four percent of 22,26 million of its own shares should lead to a 1,7 per cent increase in headline earnings per share but its net asset value per share is likely to dip 3,4 per cent as a result of the transaction.Telkom, which faces a threat to its fixed-line monopoly from February next year when far-reaching telecommunications liberalisation takes effect, has been given authority by shareholders to buy back up to 20 percent of its own shares.-Nampa-ReutersThe shares were bought back by Telkom subsidiaries and were being held as treasury stock in these companies.Analysts said the share buyback was positive for the group as it enhanced earnings and reduced the risk of a share overhang resulting from major stakeholder Thintana selling half of its stake in Telkom in July.Telkom said the buyback of four percent of 22,26 million of its own shares should lead to a 1,7 per cent increase in headline earnings per share but its net asset value per share is likely to dip 3,4 per cent as a result of the transaction.Telkom, which faces a threat to its fixed-line monopoly from February next year when far-reaching telecommunications liberalisation takes effect, has been given authority by shareholders to buy back up to 20 percent of its own shares.-Nampa-Reuters