JOHANNESBURG - Vodacom yesterday said it was planning to splurge R17.5 billion to raise its black economic empowerment (BEE) stake in a deal that could see its black shareholders cashing in on a R3bn windfall.
The group said the new deal would see its BEE partners of Royal Bafokeng Holdings (RBH), Thebe Investment Corporation and YeboYethu exchange their current shareholding for a shareholding of between 5.8 percent and 6.25 percent in Vodacom South Africa.
It said the interests of the BEE partners and that of a newly formed staff scheme would be consolidated into a new YeboYethu BEE structure that would own shares in Vodacom Group.
“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.
“YeboYethu’s shareholding in Vodacom Group will increase to around 6.25 percent, giving Vodacom Group an effective BEE shareholding of 20 percent,” said Vodacom Group chief executive Shameel Joosub.
The transaction comes as its existing R7.5bn BEE ownership scheme comes to an end in October after 10 years. Joosub said the deal would preserve and enhance Vodacom’s BEE ownership, and also consolidate BEE shareholding into a single entity.
“Shareholding is now at Vodacom Group level, which provides exposure to South African and international operations including (Kenyan mobile operator) Safaricom,” said Joosub.
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.
The original BEE deal had delivered significant value to the company’s BEE partners. Its unwind would deliver about R7.5bn, making it one of the most profitable and successful value realisations by any BEE transaction concluded in South Africa to date, he said.
A shareholder who invested the minimum of R2 500 in 2008 would unlock approximately R16 000 of value through this deal, Joosub noted.
“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 into the 2008 deal,” he said.
Zarina Bassa, YeboYethu chairperson, said yesterday that the transaction would create an immediate value for more than 82 800 black investors through the cash dividend.
She said YeboYethu shareholders would meet and vote on the deal on August 17. Vodacom said the new BEE transaction would see the Vodacom South Africa BEE shareholders settle their outstanding vendor funding.
RBH and Thebe would then exchange their shareholding in Vodacom South Africa for shares in YeboYethu.
It said a new staff scheme, funded by a R1.05bn contribution from Vodacom Group, would acquire YeboYethu shares from the existing Vodacom South Africa employee stock ownership plan and subscribe for additional YeboYethu shares.
Vodacom shares declined 2.87 percent on the JSE yesterday to close at R140.31.