Vodacom shares

AT LEAST 50000 black citizens are expected to buy shares in Vodacom

By - July 30, 2008
Vodacom shares

AT LEAST 50000 black citizens are expected to buy shares in Vodacom when SA’s most popular cellular network stages the biggest empowerment deal yet seen in the hi-tech sector.

The R7,5bn move puts 6,25% of Vodacom SA up for grabs, valuing its local operations at R120bn.

It is also one of SA’s largest employee share incentives, with staff of any colour getting free shares worth R1,87bn.

Black staff will receive 70%, with three-quarters to be allocated now and a quarter reserved for future employees.

“It’s truly broad-based and it was our intention from the outset to empower a broad base of black South Africans,” said CEO Alan Knott-Craig.

“I am delighted for the staff because 14 years is a long time for them to watch everybody get shares in the company they work for, and it’s great ordinary South Africans can buy in.”

The public offer comes at a 10% discount, but eliminates anyone with less than R2500 as the minimum investment for 100 shares. Yet Knott-Craig expects a huge response, even if people have to borrow money to buy in.

“My hope is that we will attract about 50000 individuals,” he said.

The entry barrier was set for practical purposes.

“Administering a few million people with R2,50 each would cost more than the benefits.

“I don’t think it’s a lot for someone to raise considering what they may get out of it.”

Vodacom spoke to the banks and the offer was good enough for people to get a loan to fund their buy-in, he said.

Three reasons make the offer attractive: the discount, the probability Vodacom will continue to rise in value, and a promise to pay dividends of at least 50% of its after-tax profit, which was R8bn last year. In total 14,4-million shares will be sold to the public at R25 each. Of those, 3,6-million are reserved for small business partners, mainly companies that distribute airtime. Other tranches will go to Thebe Investment and Royal Bafokeng Holdings, which were chosen as strategic investors.

The staff offer will see lower paid employees allocated more shares than their higher-paid counterparts, with the average employee gaining free shares worth R300000.

Knott-Craig said Vodacom had done well on empowerment in several areas, but was sadly deficient on black equity.

“This transaction is long overdue and is a critical part of our success. If we weren’t to do this deal we’d harm our company from a commercial point of view.”

Questions remain as to whether R7,5bn is enough to earn top marks for black equity.

The hi-tech sector set the figure in its empowerment charter as a compromise to the 25% generally expected, as a realistic sum for investors to raise, yet not so onerous that foreign companies would withdraw from SA.

The trade and industry and communications departments both congratulated Vodacom on its deal yesterday.

Vodacom BEE discussion

 

Shutterstock is the image partner of MyBroadband – more technology images

Join the conversation

Connect with Us

androidappletwitterfacebookgoogleplusfeednewsletter

Poll

What is the most important aspect of a mobile service to you?

View Results

Loading ... Loading ...

More News

SA financial, messaging apps open to hacking

Data Security

A wide-reaching security vulnerability has left a number of South African financial and messaging iOS apps vulnerable to man-in-the-middle attacks.

Save big on gadgets and tech

Sale

If you are looking for great deals on technology products and cool gadgets, this article is for you.

Eskom long weekend load shedding forecast

Eskom switch

Eskom has released its weekend load shedding forecast, showing that demand for power will outstrip projected supply for much of the long weekend.

Rhema church website hacked with anti-xenophobia message

hacker cyber crime silhouette

Hackers who associate themselves with the online activist collective Anonymous defaced the Rhema Family of Churches website.

X

Newsletter Subscription


Name
Email *
Enter the following to confirm your subscription *
Captcha image


Free MyBroadband Newsletter
Subscribe
X
bool(true)