18 October 2019

South Africa’s pension fund for government workers is tipped to buy a stake in pan-African fibre company Liquid Telecom if the latter goes ahead with a planned initial public offering, according to reports.

News wire Bloomberg reported three “people familiar with the situation” said the Public Investment Corporation (PIC) agreed to set aside funds to guarantee a $375m loan to Liquid parent Econet Global from Deutsche Bank AG.

The story has since been picked up by other news outlets.

It would then buy stock in Liquid when it lists at a discount and that money will be used to repay Deutsche, according to the sources.

However, if the plans to list are shelved, the PIC will not be required to spend any money.

Another source said it also would not necessarily invest all of the US$375m million as the size of the share sale has yet to be decided and agreed upon.

If the deal goes ahead, the sum will dwarf the US$180m stake acquired in 2018 by UK-based development-and government-backed investment group CDC. 

In 2017, Liquid said it planned to raise $600m in a bond issue to pursue further acquisitions and expand its superfast broadband network across Africa, in a bid to service  the continent’s densely populated and fast-growing cities.