Romeo Kumalo, the former head of Vodacom’s international operations, is part of a black economic empowerment group bidding to acquire a stake in the mobile operator from the Public Investment Corp (PIC), according to a report.
The Mail & Guardian reported on Friday (pay wall) that Kumalo was seeking to acquire the stake in South Africa’s largest mobile telecommunications company.
Kumalo, who is also a former executive commercial director and MD of Vodacom Tanzania, resigned from the operator last year to focus on his family business.
PIC CEO Dan Matjila told Bloomberg that the organisation, which invests pension money on behalf of public servants, is looking to sell as portion of its significant minority stake in Vodacom to black investors.
A stronger black shareholder base is critical for Vodacom if it’s going to be successful in acquiring new radio frequency spectrum that it needs to keep expanding its mobile broadband infrastructure.
Government and regulator Icasa must still set out exactly what the rules are for acquiring spectrum in bands such as 2,6GHz and 800MHz, but it is expected that black economic empowerment will form a part of the requirements.
“We’d be happy if the shares are in the hands of black investors,” Matjila told Bloomberg. “It will enhance the transformation profile of Vodacom.”
Last year, the PIC acquired government’s 13,9% equity stake in Vodacom. Government used the proceeds of the sale to help fund Eskom.
The PIC acquired a first tranche of Vodacom from government in July 2015.
“This transaction is of significance in allowing the government of South Africa, as part of selling its noncore assets, to use the proceeds towards priority investments such as energy,” the PIC said in a statement at the time. — (c) 2016 NewsCentral Media
