JOHANNESBURG – South Africa’s government has sold its 13.91 percent stake in mobile phone firm Vodacom to the Public Investment Corporation to raise 23 billion rand ($1.9 billion) in funding for power utility Eskom, the Treasury said on Wednesday.
“The sale of the Vodacom stake was the most viable option for ensuring that government was able to swiftly realise the proceeds and inject equity into Eskom to bolster the utility,” it said in a statement.
The Treasury did not say how much the deal was worth but at Tuesday’s closing price of 138.70 rand it would have raised around 28.5 billion rand. A Treasury official declined to comment.[pro_ad_display_adzone id=”70560″]
Eskom, which is struggling to keep the lights on in Africa’s most advanced economy, is facing a funding gap to 2018 of up to 200 billion rand. 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 60 billion rand subordinated loan granted to Eskom into equity.
“These measures will further strengthen the company’s balance sheet,” the Treasury said.
($1 = 12.1661 rand)
(Reuters)
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