Ozymandias
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04 March 2007
Simpiwe Piliso
Sunday Times Business Times
TELKOM has issued a directive barring the beneficiaries of its last multibillion-rand empowerment deal from acquiring the fixed-line operator’s 7.5% stake in cellphone giant Vodacom.
The bidding process for the R7.5-billion Vodacom empowerment deal is now under way and is set to be concluded later this year. The transaction adviser, Rand Merchant Bank, is expected to start talking to bidders later this month.
However, Business Times has established that Telkom, headed by chief executive Papi Moletsane, has expressed concern about the number of businessmen who have already benefited from Telkom’s earlier R6-billion empowerment deal and are also in the running for a stake in the cellphone operator.
This week, neither Telkom, Vodacom nor Vodafone would confirm the directive. Vodacom said it was a sensitive matter and discussing it could compromise the deal.
Telkom’s move to exclude beneficiaries of its own empowerment deal would scupper any bid involving businessman and former department of communications director-general, Andile Ngcaba, the ANC’s Head of the Presidency Smuts Ngonyama, and woman’s empowerment group Wiphold, headed by Gloria Serobe. They are part of the Elephant Consortium which secured the 15.1% empowerment stake in Telkom.
Approached for comment about Telkom’s exclusion bid, spokesman Khulani Qoma said he would have to discuss the matter with Moletsane first. But the following day Qoma said Telkom management could not comment on the matter and forwarded the inquiry to the Vodafone Group in the UK.
Vodafone’s communications manager Bobby Leach passed the query on to Vodacom headquarters in Johannesburg.
On Wednesday, Vodacom spokesman Dot Field said the company could not discuss the matter.
“Regrettably we will not be able to comment on the issue you raise due to its sensitivity and confidentiality and the fact that such comment could jeopardise the process,” she said.
But the following day she contacted Business Times informing it of an e-mail by Vodacom chief executive Alan Knott-Craig in which he wrote: “No person or group has been excluded for any reason. The criteria for rating potential BEE equity partners take into account the requirement that such a BEE grouping should represent Vodacom staff, broad-based representative groups of previously disadvantaged South Africans, as well as individuals whose participation would constitute a strategic ‘value-add’ to the Vodacom Group.”
He said recommendations based on the above would be submitted to Vodacom shareholders for consideration.
But while Knott-Craig denied that certain bidders would be sidelined, Business Times has confirmed that at least one beneficiary of the Elephant deal pulled out after learning about Telkom’s directive.
The board of Vodacom, jointly owned by Telkom and Vodafone Group, is expected to meet within the next two weeks to whittle down a list of black investors keen to take a stake in the company.
Around three consortiums are expected to make the shortlist and it is understood that they will be advised to form one company to make it easier for Vodacom to deal with one partner.
Asked to comment about their exclusion, Ngcaba said: “Unfortunately I don’t discuss business with the media ... and I have absolutely no comment on this matter.”
Last year some members of the Elephant Consortium launched an investigation to determine which of its shareholders had secretly cashed in their shares — and secured windfalls of up to R50-million. To date, the squabble has not been settled.
There are around 60 bidders for the Vodacom empowerment stake at present. Of the suitors, 10 are former civil servants, some of whom were involved in drafting policy for the information and communications technology industry.
Frontrunners for the 7.5% stake include the Elephant Consortium and Mowana Five Mile Communications, which lists among its members Nkenke Kekana, a former Telkom executive for regulatory affairs; Mandla Langa, a former chairman of the Independent Communications Authority of SA; and S’bu Mngadi, a former Cell C executive.
Saki Macozoma’s Safika Investments and Bulelani Ngcuka’s Amabubesi Investments are also in the running.
Telkom’s exclusion bid follows reports last year about the ANC’s radical new policy that would limit the number of empowerment deals in which its members and former senior government officials may take a stake.
— Additional reporting by Buddy Naidu
Simpiwe Piliso
Sunday Times Business Times
TELKOM has issued a directive barring the beneficiaries of its last multibillion-rand empowerment deal from acquiring the fixed-line operator’s 7.5% stake in cellphone giant Vodacom.
The bidding process for the R7.5-billion Vodacom empowerment deal is now under way and is set to be concluded later this year. The transaction adviser, Rand Merchant Bank, is expected to start talking to bidders later this month.
However, Business Times has established that Telkom, headed by chief executive Papi Moletsane, has expressed concern about the number of businessmen who have already benefited from Telkom’s earlier R6-billion empowerment deal and are also in the running for a stake in the cellphone operator.
This week, neither Telkom, Vodacom nor Vodafone would confirm the directive. Vodacom said it was a sensitive matter and discussing it could compromise the deal.
Telkom’s move to exclude beneficiaries of its own empowerment deal would scupper any bid involving businessman and former department of communications director-general, Andile Ngcaba, the ANC’s Head of the Presidency Smuts Ngonyama, and woman’s empowerment group Wiphold, headed by Gloria Serobe. They are part of the Elephant Consortium which secured the 15.1% empowerment stake in Telkom.
Approached for comment about Telkom’s exclusion bid, spokesman Khulani Qoma said he would have to discuss the matter with Moletsane first. But the following day Qoma said Telkom management could not comment on the matter and forwarded the inquiry to the Vodafone Group in the UK.
Vodafone’s communications manager Bobby Leach passed the query on to Vodacom headquarters in Johannesburg.
On Wednesday, Vodacom spokesman Dot Field said the company could not discuss the matter.
“Regrettably we will not be able to comment on the issue you raise due to its sensitivity and confidentiality and the fact that such comment could jeopardise the process,” she said.
But the following day she contacted Business Times informing it of an e-mail by Vodacom chief executive Alan Knott-Craig in which he wrote: “No person or group has been excluded for any reason. The criteria for rating potential BEE equity partners take into account the requirement that such a BEE grouping should represent Vodacom staff, broad-based representative groups of previously disadvantaged South Africans, as well as individuals whose participation would constitute a strategic ‘value-add’ to the Vodacom Group.”
He said recommendations based on the above would be submitted to Vodacom shareholders for consideration.
But while Knott-Craig denied that certain bidders would be sidelined, Business Times has confirmed that at least one beneficiary of the Elephant deal pulled out after learning about Telkom’s directive.
The board of Vodacom, jointly owned by Telkom and Vodafone Group, is expected to meet within the next two weeks to whittle down a list of black investors keen to take a stake in the company.
Around three consortiums are expected to make the shortlist and it is understood that they will be advised to form one company to make it easier for Vodacom to deal with one partner.
Asked to comment about their exclusion, Ngcaba said: “Unfortunately I don’t discuss business with the media ... and I have absolutely no comment on this matter.”
Last year some members of the Elephant Consortium launched an investigation to determine which of its shareholders had secretly cashed in their shares — and secured windfalls of up to R50-million. To date, the squabble has not been settled.
There are around 60 bidders for the Vodacom empowerment stake at present. Of the suitors, 10 are former civil servants, some of whom were involved in drafting policy for the information and communications technology industry.
Frontrunners for the 7.5% stake include the Elephant Consortium and Mowana Five Mile Communications, which lists among its members Nkenke Kekana, a former Telkom executive for regulatory affairs; Mandla Langa, a former chairman of the Independent Communications Authority of SA; and S’bu Mngadi, a former Cell C executive.
Saki Macozoma’s Safika Investments and Bulelani Ngcuka’s Amabubesi Investments are also in the running.
Telkom’s exclusion bid follows reports last year about the ANC’s radical new policy that would limit the number of empowerment deals in which its members and former senior government officials may take a stake.
— Additional reporting by Buddy Naidu
