Africa’s largest asset manager, the Public Investment Corporation, is backing a possible bid led by the former chief executive of Telkom SA SOC Ltd for a 35% stake in South Africa’s third-biggest mobile phone company, according to people familiar with the matter.

The PIC, which manages more than 2,5 trillion rand ($130 billion) in assets, is in talks to team up with the Sipho Maseko’s investment vehicle Afrifund and Mauritius-based Axian Telecom in a potential offer for the stake in the partly state-owned company, said the people, who asked not to be identified because the plans aren’t public. The 35% stake could also be combined with the PIC’s current shareholding to boost the overall holding of the group, they said.

The talks are ongoing and details of a possible offer could change, the people said. Telkom said the company was in a closed period, and would update the market on June 13 on its strategy to unlock value. The PIC and Axian Telecom did not immediately respond to requests for comment. Afrifund’s Maseko declined to comment on the matter.

There is also a possibility that the group would try to buy Telkom’s fiber and tower units, and combine them with Axian’s assets to create an African-focused infrastructure company, said the people. Such an agreement would further merge the mobile businesses of the two firms, and Telkom’s BCX unit could be sold, said the people.

While all South African mobile operators have been struggling with myriad challenges, including nationwide power cuts, vandalism of infrastructure and high unemployment, larger rivals Vodacom Group Ltd. and MTN Group Ltd. have been able to maintain growth and emerge as the country’s dominant providers. Telkom, a former state monopoly that controlled the legacy landline business, has spent years trying to reinvent itself as a mobile and internet provider but hasn’t been able to keep up.

Telkom’s $660 million asset writedown and a crash in its share price have further opened up the phone company for a possible takeover or sales of assets, the people said. Africa’s largest wireless carrier MTN previously walked away from negotiations, although it could look at the firm again at the correct pricing, said the people. MTN declined to comment.

Read more: Telkom Falls on Potential Write Off of Almost Entire Group Value

Shares of Telkom have fallen nearly 44% over the past year, giving the company a market value of about 12.9 billion rand. Telkom said earlier in February it would cut as much as 15% of its workforce, as the operator deals with an increasingly difficult operating environment and power cuts in South Africa.

--With assistance from Vinicy Chan.