GOVERNMENT SELLS VODACOM STAKE TO RAISE FUNDS FOR ESKOM ALLOCATION
Government has sold its 13.91 per cent stake in Vodacom to the Public Investment Corporation (PIC), acting on behalf of the Government Employees Pension Fund (GEPF).
As previously indicated, the proceeds from the sale will be used to finance the R23 billion allocation to Eskom. This gives expression to the commitment made in the 2015 Budget and the 2014 Medium Term Budget Policy Statement that funding of state owned companies would be in a deficit neutral manner.
Last week, Parliament passed the Eskom Special Appropriation Bill to enable the appropriation and the Eskom Subordinated Loan Special Appropriation Amendment Bill for the conversion of the subordinated loan into equity.
The National Treasury and the Department of Telecommunications and Postal Services worked together in executing the transaction. In arriving at a decision to dispose of its stake in Vodacom to the PIC, government undertook a market sounding exercise where numerous organisations presented proposals for raising the funding to be allocated to Eskom.
Government considered a wide range of options including the sale of listed shareholdings it holds directly, the disposal of listed stakes held indirectly through Development Finance Institutions (DFIs), the sale of government's unlisted shareholdings in state owned companies (SOCs) or their subsidiaries, the ring-fencing and sale of assets held by SOCs and the sale of other assets, such as property, owned by the state.