PIC to take stake in Liquid Telecom

Only if Africa's biggest fibre company goes ahead with a planned initial public offering. 

The Public Investment Corporation (PIC) is poised is set to take a stake in Liquid Telecom if Africa’s biggest fibre company goes ahead with a planned initial public offering (IPO), according to a report by Bloomberg. 

The PIC, which manages the pension funds of South Africa’s government workers, agreed to set aside funds to guarantee a $375 million (R5.6 billion) loan to Liquid parent Econet Global from Deutsche Bank, three sources told Bloomberg.

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 $375 million as the size of the share sale is yet to be decided, one of the people said.

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 percent of the company to development Finance Institution CDC Group for $180 million 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.