JOHANNESBURG—South Africa's government has sold its 14% stake in
mobile operator Vodacom Group Ltd., raising around $2 billion in
cash to help refinance the country's beleaguered state-owned power
provider.
South Africa's Finance Ministry said on Wednesday that the
shares were sold to the Public Investment Corporation, which
oversees South Africa's $140 billion government pension fund.
The proceeds from the sale of the shares in Vodacom, 65%-owned
by U.K.-based telecom group Vodafone PLC, will fund a $1.9 billion
cash injection to Eskom Holdings Ltd., the ministry said, and help
cover the conversion of a $5 billion government loan to the power
provider into equity.
"These measures will further strengthen the company's balance
sheet and will be complemented by cost reductions by Eskom," the
ministry said.
Since late last year, a series of breakdowns at Eskom's outdated
fleet of power plants has regularly plunged South African
communities and factories into darkness. Economists say the
frequent blackouts could drag economic output below 2% this
year.
As a result, Eskom's credit rating has fallen into "junk"
territory, and the company has had trouble financing its operations
and paying for overdue maintenance.
This week another arm of South Africa's government blocked Eskom
from hiking electricity levies.
Write to Patrick McGroarty at patrick.mcgroarty@wsj.com
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