PIC mulls increasing Vodacom stake
JOHANNESBURG — The Public Investment Corporation (PIC), Africa’s biggest money manager, is considering increasing its stake in Vodacom Group Ltd by buying government-owned shares in the wireless operator, people familiar with the plans said.
The Pretoria-based PIC, which already owns 3.19 percent 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 percent stake is worth R30.5 billion at Vodacom’s current share price.
South Africa is seeking to sell state-owned assets to help plug a R225 billion funding shortfall at the country’s state-owned power utility Eskom Holdings SOC Ltd. and has pledged to raise R20 billion this year and R3 billion next year.
Africa’s most-industrialised 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 percent 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 stock has gained 15 percent this year, outpacing the 8.7 percent increase in the shares of Johannesburg-based MTN Group Ltd, Africa’s biggest mobile phone company.
Vodacom is 65 percent owned by Newbury, England-based Vodafone and has operations in Lesotho, Tanzania, the Democratic Republic of Congo and Mozambique.
APART from South Africa Vodacom has operations in Lesotho, Tanzania, the Democratic Republic of Congo and Mozambique.