Johannesburg - South Africa sold its R28.7-billion stake in Vodafone’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-percent holding in wireless carrier Vodacom Group Ltd to Africa’s largest money manager, the Public Investment Corporation, the National Treasury said in an emailed statement on Wednesday.
“The sale of the Vodacom stake was the most viable option for ensuring that government was able to swiftly realise 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-industrialised nation. The utility has a R225 billion cash-flow shortfall and has been carrying out scheduled blackouts every other day this year as demand exceeds supply from ageing power stations.
Vodacom rose for a second day, adding 0.2 percent to R139 at 9.02am in Johannesburg.
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 emailed 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