South African’s Public Investment Corporation (PIC) has abandoned its proposed sale of a roughly 15% holding in Vodacom.
The move, which could have a major impact on Vodacom, has not been explained by the PIC. The proposed sale was a strategy to increase Vodacom’s black shareholding – itself part of a larger drive to increase black ownership of South Africa’s industries. The PIC was planning to sell the stake to a consortium led by former Vodacom executive Romeo Kumalo, which would have increased Vodacom’s black shareholding.
This would have allowed Vodacom to bid in upcoming spectrum auctions planned for the start of next year by regulator ICASA (Independent Communications Association of South Africa), as companies must have 30% black ownership in order to participate. However, the government has begun legal action against ICASA, which may derail the proposed auctions.
The issue of black ownership across South African industries has been present since the apartheid era, and the country is taking steps to address it. Currently, 19% of Vodacom’s investors are black, while for MTN this figure is 39%.