Johannesburg - South Africa is in advanced talks about the terms of the sale of some or all of its R27.7bn stake in Vodacom and a deal could be announced as early as this week, according to people familiar with the discussions.
The state-owned Public Investment Corporation (PIC)., Africa’s biggest money manager with about 1.6 trillion rand in assets, will probably buy all of the government’s 13.91% shareholding in Johannesburg-based Vodacom Group, said the people, who asked not to be identified as the deal is yet to be announced.
The purchase will likely be completed in stages, according to one of the people.
“We are not commenting on what non-core assets are going to be sold to raise money,” Treasury spokeswoman Phumza Macanda said by text message on Tuesday.
Vodacom declined to comment.
Proceeds from the stake sale will go toward a rescue package for South African state-owned power utility Eskom Holdings, which needs to build or develop new plants to resolve an electricity shortage in Africa’s most industrialised nation.
The utility has a R225bn funding shortfall, and has been carrying out regular blackouts as demand exceeds supply from aging power stations.
Vodacom shares gained 2% to R133.70 by the market close in Johannesburg on Tuesday, boosting the year’s increase to 4.1%. That compares with a 5.7% gain on the FTSE/JSE Africa All Share Index.
The company has more than 61 million customers across Tanzania, Lesotho, Mozambique, the Democratic Republic of Congo and South Africa.
The PIC already owns shares in Vodacom, and could become the company’s second-largest shareholder after UK carrier Vodafone, which has a 65% stake. The fund manager handles the majority of South African government worker pension funds.