Johannesburg - South Africa's government sold its 13.91-percent stake in mobile firm Vodacom to raise funds for power utility Eskom at a 10-percent discount due to the large size of the deal, the Treasury said on Wednesday.
“The pricing is based on market prices, based on the 30-day volume weighted average price (of its shares),” it said in a statement.
“We are anticipating that the proceeds will be in excess of 23 billion rand that will be allocated to Eskom.”
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