Pushed back for ten days to allow foreigners to acquire stock
Pushed back 10 days to allow foreigners to acquire stock
THE LISTING of Vodacom Tanzania, on the Dar es Salaam Stock Exchange (DSE), has been pushed back by 10 days to allow regional and global foreigners time to acquire the stock.
Vodacom spokesperson Byron Kennedy said yesterday that following recent changes to the Electronic and Postal Communications Act 2010 through the Finance Act 2017, Tanzania’s Capital Markets and Securities Authority had issued a directive to extend the Initial Public Offering (IPO) deadline by ten working days to open the process to international investors.
“We believe this is a positive move for the more than 40 000 Tanzanians that have invested in the IPO as it is expected to improve liquidity of the Vodacom Tanzania shares once they are listed,” he said.
The Tanzanian parliament passed the Finance Act last year to amended the listing requirements under the Electronic and Postal Communication Act, 2010. It introduced mandatory listing requirements and required licensed telecommunications operators to list 25 percent of their authorised share capital through an IPO on the DSE.
The amendments were made as the government recognised the importance of the telecommunications sector, to promote socio-economic development.
Foreign investors were allowed to buy shares after the listing was stalled.
The listing of Vodacom Tanzania, a subsidiary of Vodacom, South Africa’s biggest mobile operator by subscribers, was scheduled in May, but stalled to June.
Sibonginkosi Nyanga, Momentum Securities, said that Vodacom Tanzania had requested the regulator to extend the IPO to foreigners.
“Locals did not manage to mop up all the 25 percent stake due to liquidity constraints in the Tanzanian market,” he said.
“The Tanzanian telecommunications market has significant potential. However, this dents the government’s hope of broad-based economic empowerment of its people through ownership of its leading companies,” said Nyanga.
Vodacom which has been operating in Tanzania for 17 years planned to raise $213 million (R2.85 billion) to adhere to a new law.
Key role Vivek Mathur, the chief operating officer for Vodacom’s international business said in a prospectus in February that the capital raising and listing were in line with the government’s intention to strengthen the country’s telecommunications sector to play a key role as the engine of economic growth and socio-economic development.
“This process also aims to widen financial inclusion among Tanzanians, and to economically empower the people of Tanzania,” he said. Tanzania is the second largest telecommunications market in East Africa behind Kenya.
Vodacom share rose 0.94 percent on the JSE yesterday to close at R168.