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Johannesburg - The Public Investment Corporation (PIC), Africa’s biggest money manager, is considering increasing its stake in Vodacom Group by buying government-owned shares in the wireless operator, people familiar with the plans said.
The Pretoria-based PIC, which already owns 3.19% of Johannesburg-based Vodacom, is seeking advisers for a deal that could make it the company’s second-largest shareholder after UK carrier Vodafone Group Plc, said one of the people, who asked not to be identified because the proposal hasn’t been made public.
The government’s 13.9% stake is worth R30.5bn at Vodacom’s current share price.
South Africa is seeking to sell state-owned assets to help plug a R225bn funding shortfall at the country’s state-owned power utility Eskom and has pledged to raise R20bn this year and R3bn next year.
South Africa’s economy faces the risk of credit-rating downgrades and power cuts for at least two years because Eskom can’t meet demand after delaying investment in new plants.
The PIC manages the majority of South African government worker pension funds and its investments account for 13% of the market capitalisation of stocks traded in Johannesburg, the company said on its website.
Direct sale
Vodacom, which had 61.1 million customers across five African countries at the end of last year, favours a direct, off-market sale of the government’s stake as it would avert a share overhang, said another person familiar with Vodacom’s thinking.
The person asked not to be identified because Vodacom hasn’t commented publicly on the matter. An overhang refers to a block of shares released onto the market in one go, sending the price lower.
Vodacom’s shares traded 0.5% weaker at 147.53 rand as of 4:08 p.m. in Johannesburg.
The stock has gained 15% this year, outpacing the 8.7% increase in the shares of Johannesburg-based MTN Group, Africa’s biggest mobile phone company.
National Treasury spokesperson Phumza Macanda declined to comment. Vodacom spokesman Richard Boorman declined to comment.
Vodacom is 65% owned by Newbury, England-based Vodafone and has operations in Lesotho, Tanzania, the Democratic Republic of Congo and Mozambique.
