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    Home » News » Vodacom mulling R15bn BEE deal

    Vodacom mulling R15bn BEE deal

    By Loni Prinsloo25 January 2017
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    Vodacom is considering the sale of a R15bn stake in what would be one of the country’s biggest ever deals aimed at boosting black participation in the economy, according to two people familiar with the matter.

    The mobile group plans to buy back part of the 12,47% stake owned by government pension fund manager the Public Investment Corp, said the people, who asked not to be identified as the deliberations are private.

    The shareholding could then be listed as a separate entity restricted to black investors, they said. Negotiations with the PIC are ongoing and an outcome is expected in coming months, said one of people.

    “Vodacom is committed to delivering on the ideals of black economic empowerment and continues to explore a variety of options with the primary objective of broad-based inclusivity,” a spokesman said in e-mailed comments, without directly commenting on whether such as transaction is being considered.

    “Any transaction of this nature will be conducted through a well-governed, highly transparent process.”

    The deal would help South Africa’s market leader in terms of mobile subscribers to comply with a government initiative to help compensate those discriminated against during apartheid.

    Under new guidelines effective 7 November, telecommunications companies should aim to be 30% black owned, with a third of that stake held by black women. With Vodacom’s existing black empowerment deal coming to an end in 2018, the company plans to put together a replacement programme in line with the new policy, said one of the people.

    Vodacom shares fell 1% to R151 at the close in Johannesburg, valuing the company at R225bn.

    The PIC, which manages government worker pensions and is Africa’s biggest money manager with R1,9 trillion in assets, acquired the Vodacom stake from the government in 2015. The Pretoria-based company has considered previous sales to consortia of prominent black business people, one of which included former senior Vodacom executive Romeo Kumalo.

    “It may be more optimal for Vodacom to buy its own shares back from the PIC and to implement a black empowerment offering with all the requisite groups” rather than a direct sale by the PIC, said Soria Hay, director of Bravura Capital in Johannesburg, which helps facilitate BEE transactions.

    Vodacom’s new empowerment programme would be double the size of the R7,5bn plan that ends next year. Beneficiaries of that fund include employees and black-owned investment companies Royal Bafokeng Holdings and Thebe Investment Corporation who can sell their shares when the programme ends.

    Crosstown rival MTN Group started a R9,9bn empowerment plan at its South African unit last year that boosted its black ownership to more than 30%.  — (c) 2017 Bloomberg LP



    MTN Vodacom
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