The government has agreed to sell its R28.7 billion stake in Vodafone Group Plc’s African unit to raise funds for state-owned power utility Eskom Holdings SOC Ltd. amid a countrywide electricity shortage.
The government sold its 13.91% holding in wireless carrier Vodacom Group Ltd. to Africa’s largest money manager, the Public Investment Corp., the National Treasury said in an e- mailed statement Wednesday.
“The sale of the Vodacom stake was the most viable option for ensuring that government was able to swiftly realize the proceeds and inject equity into Eskom to bolster the utility,” the Treasury said. “The PIC’s offer to government was in line with pricing quoted by other institutions when taking into account the large size of the stake.”
South Africa has worked out a R23 billion bailout package for Eskom, which is building new plants to resolve the power shortage in the continent’s most-industrialized nation. The utility has a 225 billion-rand cash-flow shortfall and has been carrying out scheduled blackouts every other day this year as demand exceeds supply from aging power stations.
The PIC, which manages government workers’ pension money, becomes Vodacom’s largest shareholder after Newbury, England- based Vodafone. Vodacom has more than 61 million customers across Tanzania, Lesotho, Mozambique, the Democratic Republic of Congo and South Africa.
Vodacom has “a constructive relationship” with the PIC, which has been a shareholder since the company started trading in Johannesburg in 2009, spokesman Richard Boorman said in an e- mailed statement.
“We’re looking forward to continuing to work with the PIC and welcome their decision to increase their stake in Vodacom,” he said.
- Bloomberg
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