Vodafone Group CEO on Wednesday squashed market talk that the South African government was planning to offload its 13.9% shareholding in the local subsidiary, Vodacom to raise funding for power utility Eskom.
Speaking to reporters at a media briefing in Rosebank, the boss of Vodafone Group Vittorio Colao said: “I personally haven’t got any discussions on that topic (South Africa government selling its shareholding in Vodacom.)
Market talk has suggested that the South African government was in a process of selling its stake to fund Eskom, which is facing major power generation problems and has funding shortfalls that run into billions. The country-wide power outages, which also occurred on Wednesday during the media briefing, may have added to the speculation.
Vodacom, SA’s largest mobile phone operator by subscribers ahead of MTN, is 65% owned by the British mobile giant Vodafone, with 17% held by the South African government and the Public Investment Corporation.
Colao pointed out that Vodafone was happy with the current status quo of Vodacom with the South African government as a shareholder.
“I think we are happy where we are. We are happy with the current situation because I think it’s a good mix of a long-term international partner of South Africa with South African money, with some government interests,” he said.
But Colao said Vodafone was opened to talks with the South African government.
He added that Vodafone, the world’s second biggest mobile operator behind China Mobile based on subscribers, is committed to the South African market. “As I said, I mean, we were here…we founded the company. So, we’ve been here when nobody had a trust in the country and will be here forever,” he said.
Vodacom has been declaring a consistent dividend for its shareholders, including the South African government that owns a 13.9% stake in Vodacom and Colao seems very happy with the current shareholder arrangement.
He said: “So, we are good partners of the local government. And we will listen to their needs or requests, but I will say I’m pretty fine with the current mix. It has worked for the company, for the customers and for the shareholders.”
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