South African teleco Vodacom has received support from one of its major shareholders for a swap deal that will see it enter the Kenyan market by taking over a 35 per cent stake of Safaricom from UK multinational Vodafone.
Vodacom said South Africa’s Public Investment Corporation (SOC) Ltd had written a letter in support of the Sh266.6 billion (€2.4 billion) transaction.
“In its letter of support, the PIC has undertaken to vote in favour of the resolutions required to implement the proposed transaction at the general meeting to be convened by Vodacom Group,” the firm said in a statement Friday.
PIC is Vodacom’s largest institutional investor with 15.63 per cent stake in the South African telecom.
The Corporation is a state-owned investment manager whose clients include the Government Employees Pension Fund.
It is large in equities accounting for approximately 12.5 per cent of the market capitalisation of the Johannesburg Stock Exchange (JSE).
Vodafone, which currently owns 40 per cent of Safaricom, will cede majority stake in return for 226.8 million new ordinary shares in Vodacom.
Once the deal is completed, Vodafone will see its holdings in Vodacom rise from 65 per cent to 70 per cent.