R17.5bn BEE deal for Vodacom

VODACOM is preparing to implement a R17.5 billion black economic empowerment (BEE) deal.

In terms of the mooted transaction, Vodacom’s black economic empowerment partners Royal Bafokeng Holdings (RBH), Thebe Investment Corporation and YeboYethu would exchange their current shareholding in Vodacom South Africa for a shareholding of between 5.8% and 6.25% in the Vodacom Group.

Interests of the BEE partners and those of a newlyformed staff scheme would be consolidated into a new YeboYethu BEE structure that would own shares in the Vodacom Group.

A shareholder, who invested the minimum R2 500 in 2008, would unlock about R16 000 of value through this deal.

Said Vodacom Group chief executive Shameel Joosub yesterday: “Part of this value will be returned to our existing BEE shareholders in the form of an upfront special dividend of R3bn, which provides substantial liquidity for our partners and amounts to 2.7 times the original capital they invested in the 2008 deal.

“A shareholder who invested the minimum R2 500 in 2008 will receive about R6 000 cash.

“Our intention was always to move our BEE investors from being shareholders in Vodacom South Africa to a shareholding at the group level, thereby giving them exposure to the broader local and international markets in which the Vodacom Group trades.

“YeboYethu’s shareholding in the Vodacom Group will increase to about 6.25%, giving the Vodacom Group an effective BEE shareholding of 20%.”

The transaction comes as the company’s existing R7.5bn BEE ownership scheme comes to an end in October, after running for 10 years.

Joosub said the deal would preserve and enhance Vodacom’s BEE ownership.

In addition to opening local and international opportunities for black investors, the company decided to move black shareholding from Vodacom South Africa to the group level in order to foster links between YeboYethu and the Vodacom Group, which is the listed entity.

YeboYethu is also listed on the JSE’s BEE segment.

He said the original BEE deal had delivered significant value to the company’s BEE partners.

“Its unwinding would deliver about R7.5bn,” he pointed out.

Zarina Bassa, YeboYethu chairperson, yesterday said the transaction would create an immediate value for more than 82 800 black investors through the cash dividend.

“It is an opportunity to reinvest on favourable terms in the Vodacom Group,” Bassa said.

YeboYethu shareholders would meet and vote on the deal on August 17, she added.

PICTURE: BLOOMBERG/ANA ARCHIVES Vodacom said yesterday it had entered into an agreement with its black economic empowerment (BEE) partners and a newly formed staff scheme. Shameel Joosub, chief executive of the Vodacom Group said the intention was to move its BEE investors from being...