PIC ready to take stake in fibre company after Deutsche loan
Public Investment Corporation agrees to guarantee a $375m loan to Liquid Telecom parent Econet Global and buy stock after listing
The Public Investment Corporation (PIC) is poised to take a stake in Liquid Telecom if Africa’s biggest fibre company goes ahead with a planned initial public offering (IPO), according to informed sources.
The PIC, which manages the pension funds of SA government workers, agreed to set aside funds to guarantee a $375m (R5.6bn) loan to Liquid parent Econet Global from Deutsche Bank, the three sources said.
The money manager would then buy stock in Liquid when it lists, at a discount to the offer price, and that money will be used to repay Deutsche, they said, asking not to be identified as the information is not public.
If the listing does not go ahead, the PIC will not be required to spend any money, they said. It also would not necessarily invest all of the $375m as the size of the share sale is yet to be decided, one of the people said.
The Pretoria-based company oversees the equivalent of $135bn. While the deal was set in motion early in 2018, Liquid’s share sale was deferred due to unfavourable market conditions.
Econet instead sold almost 10% of the company to development Finance Institution CDC Group for $180m as it proceeded with an expansion.
An IPO is still part of the company’s plans. Deutsche declined to comment.
When asked about the deal, Deon Botha, PIC head of corporate affairs, said it was “party to a transaction” that went through “normal governance and investment processes”. He said terms and details of the transaction are confidential.
Liquid, which is based in Johannesburg, has about 70,000km of network running from Cape Town to Cairo, making it the largest fibre company in Africa. Econet was founded by Zimbabwe’s Strive Masiyiwa.
With Roxanne Henderson.