Bloomberg has reported that the South African government is likely to sell its 13.9% stake in Vodacom – worth around R28 billion at the current share price – to fund Eskom.
The report, which cited people familiar with the matter, said the government does not view its stake in Vodacom as strategic. The sale is also unlikely to face opposition from unions.
Reuters reported in January that the government may fund the $870 million as soon as June 2015.
“National Treasury has already identified a viable strategy to raise the required amount of funding that could be executed,” Treasury spokesman Jabulani Sikhakhane said at the time.
“Due to the commercial sensitivities involved, we cannot provide details. However, the process is proceeding to plan,” Sikhakhane said.
According to Reuters, sources told it in December 2014 that the government was considering selling its shares in Vodacom and Telkom as part of its funding strategy.
However, according to the Bloomberg report a Telkom sale is unlikely. This is partly because it would face opposition from labour unions as Telkom is already trying to cut jobs.
The Bloomberg report stated that MTN was interested in buying a stake in Telkom, citing three people with knowledge of the negotiations.
An acquisition of government’s Telkom stake by MTN would, apart from union opposition, also face scrutiny by the Competition Commission.
The most likely outcome is therefore the sale of the government’s share in Vodacom.