A planned sale of shares in Vodacom by the Public Investment Corp (PIC) to black investors has been abandoned, according to two people familiar with the situation.
The proposed sale by Africa’s biggest money manager, which oversees government workers’ pensions, to a consortium including former Vodacom executive Romeo Kumalo would have boosted the Vodafone unit’s black shareholding, said the people, who asked not to be identified as the negotiations are private.
Vodacom will continue to seek potential black shareholders, one of the people said.
An increase in Vodacom’s black shareholding would improve the wireless carrier’s chances of winning high-speed Internet spectrum in a proposed auction that the Independent Communications Association of South Africa, the industry’s regulator, has said may raise US$1bn early next year. Companies need 30% black ownership to place a bid, according to rules published by the regulator.
The condition is part of South Africa’s push to increase black ownership of industries to address the legacy of whites-only rule during apartheid, which ended in 1994, that deprived the black majority of economic opportunities.
Vodacom is currently 18,7% owned by black investors, compared with 38,75% for MTN Group. Both companies are based in Johannesburg.
“We are considering the contents of the ITA (invitation to apply), including the various obligations in its entirety and intend then to take the necessary steps to comply with the requirements of the regulator,” Vodacom spokesman Byron Kennedy said in an e-mailed response to questions on the spectrum auction. He declined to comment on the PIC.
The allocation of spectrum in South Africa has been in limbo for almost five years in part due to deliberations by the telecommunications ministry and the regulator over broadband policy.
Icasa’s decision to kickstart the auction process last month was thrown into doubt days later, when minister Siyabonga Cwele said he would take legal action against the regulator for failing to consult with his ministry.
The government last year sold its 14% stake in Vodacom, the wireless operator with the most South African subscribers, to the PIC to raise funds to support expansion by its power utility.
The PIC was in talks with various black investors seeking to buy a stake, CEO Dan Matjila said in April.
Vodacom shares fell by 0,7% to R158,36 rand, valuing the company at R235,4bn as of 4.38pm in Johannesburg on Friday. — (c) 2016 Bloomberg LP