According to a recent Bloomberg report, the PIC is seeking advisors for the deal which has the potential to make the group Vodacom’s second largest shareholder after Vodafone.
The PIC already owns 3.19% of Vodacom but is looking to increase this by buying the Government’s current share in Vodacom a 13.9% stake, which is valued at R30.5 billion.
The South African government may be looking to sell their shares in Vodacom as part of the effort to raise capital to cover the budget shortfall of power utility Eskom. The National Treasury said in September 2014 that “it would dispose of non-strategic assets to provide capital for Eskom,”
The PIC is a key driver of investment within South Africa as it is responsible for managing funds acquired from the South African Government Employees Pension Fund (GEPF) and has more than R1.6 trillion under its management.
According to the report, Vodacom would prefer a direct, off-market sale of the government’s stake as it would avert a share overhang. An overhang refers to a block of shares released onto the market in one go, sending the price lower.