JOHANNESBURG - Mobile phone company Vodacom said on Monday it had entered into a agreement of up to R17.5 billion with its existing black economic empowerment (BEE) partners and a newly formed staff scheme that would see the BEE partners exchange their current shareholding in Vodacom South Africa for a shareholding of between 5.8 percent and 6.25 percent in Vodacom Group.

"Vodacom Group has agreed terms with Royal Bafokeng Holdings, Thebe Investment Corporation, YeboYethu (existing BEE partners) and a newly formed staff scheme, whose combined interests will be consolidated into a new YeboYethu BEE structure that will own shares in Vodacom Group," it said.

Vodacom, a subsidiary of British firm Vodafone, is the largest mobile network operator in South Africa with significant operations in Lesotho, Tanzania, the Democratic Republic of Congo, Mozambique and Kenya, through Safaricom.

It said the transaction, which was subject to regulatory and shareholder approval, would be the largest ever broad-based BEE transaction in the telecommunication industry and would replace and build on a R7.5 billion BEE ownership scheme that was concluded in 2008 and is due to unwind on October 8.

The existing transaction, comprising a 6.25 percent shareholding in Vodacom SA, has benefitted over 102,000 YeboYethu investors and 8,500 current and past employees.

The new transaction will be funded through a combination of third party and vendor financing, reinvested equity of R4.5 billion from the existing BEE partners and facilitation from Vodacom Group. The new transaction has a 10-year funding term.

Some 4,637  Vodacom SA employees will participate in a new staff scheme funded by Vodacom Group to the value of R3.5 billion, and through this vehicle workers will own approximately 20 percent of YeboYethu.

 "It was crucial for us to retain our empowerment shareholding but at the same time, go one step further," Vodacom Group CEO Shameel Joosub said.

"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 Vodacom Group trades."

 - African News Agency (ANA)