It seems unlikely South African power utility Eskom Holdings will, at this stage, dispose of its stake in state-owned IT group arivia.kom and the second national operator (SNO), despite government`s strategy to rid state-owned enterprises of non-core assets.
Eskom spokesman Fani Zulu says, unlike Transnet and Denel, the electricity giant is yet to make a decision about the future of its 45.6% stake in arivia.kom, and indicates it would most likely not give up its 15% stake in the SNO just yet.
Despite this, he says, Eskom is positioning itself to focus on its core business, and is exiting many non-core investments.
"This can be seen in local and African expansion, where we are focusing purely on opportunities that will create electricity flows to SA, and we are biased towards investments in power generation and trading," Zulu says.
Quality of investment
"Then our other businesses, core and non-core, will be looked at to see whether they, either directly or indirectly, support our core business, and each of these will be evaluated on a case-by-case basis."
He adds that even non-core businesses would be evaluated in terms of quality of investment before decisions are made about their disposal.
Denel and Transnet recently announced they would dispose of their respective stakes, of 22.98% and 31.96%, in arivia.kom, and it is understood Eskom holds pre-emptive rights to these shares. However, Zulu says it is unlikely these rights would be exercised, which is why Denel announced a tender for its stake.
In terms of the SNO, Zulu explains that, while this is not a core business, Eskom considers it of strategic importance to SA and will most likely play an active role in the Telkom rival until it gets off the ground.
"Maybe then we will make the decision to exit, but not now."
Eskom Telecommunications, residing within Eskom Enterprises, a subsidiary of Eskom Holdings, was originally created to consolidate Eskom`s telecoms business, including the private telecommunications network, which has been the exclusive provider of telecoms services to Eskom since inception.
Fibre optic network
The SNO, says Zulu, will benefit from access to Eskom`s substantial national telecommunications network built across its power lines. The opportunity will be there for the SNO to establish a fibre optic network across Eskom`s electricity infrastructure.
The Department of Public Enterprises indicated in a statement that Transnet, which also holds a 15% stake in the SNO through Transtel, its telecommunications division, may hold onto this interest.
"Transtel`s networks, technical expertise, support services and countrywide presence, as well as its rights-of-way, equipment buildings, high sites, depots, an international satellite teleport, and major corporate customers, can all add value to the SNO," it said.
However, a source has speculated that Eskom is in a far better position to hold onto non-core assets as it is a profitable operation. Loss-makers Denel and Transnet, on the other hand, have greater liquidity requirements and need to strengthen their cash positions to deal with balance sheet difficulties, he says.
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