Johannesburg - South Africa's government has sold its 13.91 percent stake in mobile phone firm Vodacom to the Public Investment Corporation to raise R23-billion in funding for power utility Eskom, the Treasury said 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,” it said in a statement.
The Treasury did not say how much the deal was worth, but at Tuesday's closing price of R138.70 it would have raised around R28.5-billion. A Treasury official declined to comment.
Eskom, which is struggling to keep the lights on in South Africa, is facing a funding gap to 2018 of up to R200-billion. The energy regulator rejected its latest request for a price hike this week.
In addition to the funds from the Vodacom sale, the government is converting a R60-billion subordinated loan granted to Eskom into equity.
“These measures will further strengthen the company's balance sheet,” the Treasury said.
Reuters