Government sells Vodacom stake to fund Eskom allocation

Posted On Wednesday, 01 July 2015 15:43 Published by
Rate this item
(0 votes)

National Treasury has announced that government has sold its stake in Vodacom to the Public Investment Corporation (PIC) to raise funds for a R23 billion allocation to Eskom.


“Government has sold its 13.91% stake in Vodacom to the Public Investment Corporation (PIC), acting on behalf of the Government Employees Pension Fund (GEPF) … the proceeds from the sale will be used to finance the R23 billion allocation to Eskom,” said Treasury on Tuesday.

Treasury said 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 while also ensuring government was still able to deliver on its strategic objectives”.

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. 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.

“The PIC’s offer to government was in line with pricing quoted by other institutions when taking into account the large size of the stake and also provided the added benefit of keeping the shares within the broader family of public sector-related institutions,” it said. In addition, to the allocation of R23 billion to Eskom, government is committed to converting to equity the R60 billion subordinated loan that had previously been provided to Eskom.

Treasury said these measures will further strengthen the company’s balance sheet and will be complemented by cost reductions by Eskom and the utility applying for tariff adjustments through the normal regulatory processes. The National Energy Regulator of South Africa (NERSA) this week announced its decision to decline Eskom’s most recent tariff increase application.


Most Popular

Equites Property Fund’ prime logistics portfolio delivers exceptional returns

May 04, 2022
Andrea Taverna-Turisan
Equites Property Fund Limited today announced growth in its distribution per share of…

When is eviction legal? All you need to know about dealing with problem tenants

May 04, 2022
Buying an investment property is great, especially when you’ve chosen a good location.…

Steilloop Shopping Centre makeover exceeds customer needs

Apr 22, 2022
Rural Limpopo's Steilloop Shopping Centre was bought by developer, GMI Property Group…

Deadline looms for energy performance compliance for commercial buildings

Apr 25, 2022
Energy certiticate
By 7 December 2022, commercial properties in specified sectors must have obtained their…

First quarter Rode’s Report raises doubts over the Sectional Titles Schemes Management Act

Apr 25, 2022
Default Image
The latest issue of the Rode’s Report has brought into question the practicality of the…

Please publish modules in offcanvas position.