This is a very sensitive business and the golden share will ensure that our national interest can never be compromised

Jeff Radebe Public Enterprises Minister

Since March 1997, the government has sold-off 18 state-owned entities, ranging from radio stations to South African Airways, raising about 26.8bn rand.

The government plans to list shares in the state-owned telecoms company, Telkom, by the end of the current financial year, Mr Radebe said.

Eight other companies have also been slated for privatisations, which are expected to raise another 12bn rand.

Mr Radebe, a member of the South African Communist Party which remains opposed to the privatisations, said the government had reached agreements with labour unions on the sell-offs after a successful general strike last October.

Denel deal

Mr Radebe told reporters the government would retain a 70% stake in the Denel group, but added a public listing was possible.

"This is a very sensitive business and the golden share will ensure that our national interest can never be compromised," he said.

The domestic arms company was set up under white apartheid rule to by-pass an international arms embargo on South Africa.

Denel, which includes aerospace, ordnance, commercial and specialist arms, made sales of 3.5bn rand in 2001, with 46% of revenues coming from exports.

BAE's investment

BAE Systems is expected to invest in research and development programmes and marketing.

"We believe this partnership with BAE Systems will make Denel really a global player in this high-tech industry," Mr Radebe said.

"We believe that the order book of Denel is going to dramatically increase," he added.

BAE executive director in South Africa Stuart McIntyre said it was too soon to determine the impact on the 10,000 jobs at Denel.

Telkom sale

A further 20% of Telkom is expected to be listed before the end of March 2003.

"I can confirm that conditions have improved so that we can proceed with the Telkom initial public offering before the end of this current financial year," Mr said.

A 30% stake in Telkom was sold to SBC of the US and Telkom Malaysia for 5.6bn rand in May 1997, in the biggest privatisation deal to date.

The sale was originally set for 2001, but legislative delays and a weak telecoms market forced a postponement.