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South Africa's Telkom says government will not back KT deal
JOHANNESBURG (Reuters) - South Africa's Telkom (TKGJ.J) said on Friday the government will not back its partnership with KT Corp (030200.KS), a South Korean firm that wants to buy a 20 percent post-issue stake in the fixed-lined company.
South Korea's No. 2 mobile operator last month cut is offer for the stake by nearly a third, bringing the total sale value down to about 3.3 billion rand ($385.46 million).
Telkom, which is majority owned by the South African government, said the proposed deal was presented to cabinet on May 30 and did not get the support it needed.
"Telkom was informed by the Minister of Communications ... that (the) cabinet had taken the decision not to support the transaction as proposed," it said in a statement.
Telkom said it will discuss the implications of the cabinet's decision with the minister.
Battered in recent years by steadily falling fixed-line revenue and expensive blunders in Nigeria, Telkom has been looking to offset shrinking demand for its core business by pushing into new businesses and markets.
The company has also been struggling to keep up with bigger Johannesburg-based African mobile operators MTN (MTNJ.J) and Vodacom (VODJ.J).
KT has been scouring for opportunities in Africa, Latin America and Eastern Europe seeking to grow earnings as competition back home heats up. ($1 = 8.5613 South African rand)
(Reporting by Olivia Kumwenda)
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