South Africa Said to Near Agreement on Vodacom Sale Terms

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South Africa is in advanced talks about the terms of the sale of some or all of its 27.7 billion rand ($2.3 billion) stake in Vodafone Group Plc’s African unit and a deal could be announced as early as this week, according to people familiar with the discussions.

The state-owned Public Investment Corp Ltd., Africa’s biggest money manager with about 1.6 trillion rand in assets, will probably buy all of the government’s 13.91 percent shareholding in Johannesburg-based Vodacom Group Ltd., said the people, who asked not to be identified as the deal is yet to be announced. The purchase will likely be completed in stages, according to one of the people.

“We are not commenting on what non-core assets are going to be sold to raise money,” Treasury spokeswoman Phumza Macanda said by text message on Tuesday. Vodacom declined to comment.

Proceeds from the stake sale will go toward a rescue package for South African state-owned power utility Eskom Holdings SOC Ltd., which needs to build or develop new plants to resolve an electricity shortage in Africa’s most industrialized nation. The utility has a 225 billion-rand funding shortfall, and has been carrying out regular blackouts as demand exceeds supply from aging power stations.

Vodacom shares were little changed at 133.63 rand as of 11:27 a.m in Johannesburg on Wednesday, while the year’s increase is 4 percent. That compares with a 6.2 percent gain on the FTSE/JSE Africa All Share Index.

The company has more than 61 million customers across Tanzania, Lesotho, Mozambique, the Democratic Republic of Congo and South Africa.

The PIC already owns shares in Vodacom, and could become the company’s second-largest shareholder after U.K. carrier Vodafone, which has a 65 percent stake. The fund manager handles the majority of South African government worker pension funds.

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