South Africa’s national treasury has sold its 13.91% stake in Vodacom (JSE:VOD) to the Public Investment Corporation (PIC), the government announced today.
It will then reinvest R23bn (US$1.88bn) into troubled electricity utility Eskom. PIC, is acting…
South Africa’s national treasury has sold its 13.91% stake in Vodacom (JSE:VOD) to the Public Investment Corporation (PIC), the government announced today.
It will then reinvest R23bn (US$1.88bn) into troubled electricity utility Eskom. PIC, is acting on behalf of the government employee pension fund (GEPF).
The process was jointly executed by the treasury and the Department of Telecommunications and Postal Services. It described the expected move as the most viable way to “swiftly realise the proceeds and inject equity into Eskom to bolster the utility while also ensuring government was still able to deliver on its strategic objectives”.
Vodacom is owned by the UK’s Vodafone (65%) and the PIC (13.91%), with the remaining 21.09% trading on the Johannesburg Stock Exchange. It has a market cap of R206.38bn (US$16.87bn).
The PIC’s offer “was in line with pricing quoted by other institutions when taking into account the large size of the stake and also provided the added benefit of keeping the shares within the broader family of public sector-related institutions,” the government said.
The government also said it would deliver on plans to convert to equity the R60bn (US$4.9bn) subordinated loan that had previously been provided to Eskom.
Finance minister Nhlanhla Nene reportedly told journalists that the government was not on a “campaign to sell assets,” but acknowledged that it would review its corporate investments in companies “not core to the government’s function.”
The state also holds a 40% stake in incumbent Telkom.