PIC set to buy state’s share in Vodacom

THE government is in advanced talks about the terms of the sale of some or all of its R27.7-billion 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 R1.6-trillion 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 is likely to be completed in stages.

“We are not commenting on what non-core assets are going to be sold to raise money‚” Treasury spokeswoman Phumza Macanda said on Tuesday. Vodacom declined to comment.

Proceeds from the stake sale will go towards a rescue package for stateowned power utility Eskom‚ which needs to build or develop new plants to resolve an electricity shortage. The utility has a R225-billion funding shortfall and has been carrying out regular blackouts as demand exceeds supply from ageing power stations.

Vodacom shares gained 2% to R133.70 on Tuesday‚ boosting the year’s increase to 4.1%. The company has more than 61 million customers in South Africa, the DRC, Tanzania‚ Lesotho and Mozambique.

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. – Bloomberg