Vodacom’s empowerment call seems to be on hold
The news this week that UK cellphone giant Vodafone was planning to list Vodacom has brought uncertainty into the market – and the plans of hopeful participants – regarding Vodacom's planned R7.5 billion empowerment deal.
Vodafone owns 50 percent of Vodacom and plans to buy the remaining 50 percent from Telkom.
It will immediately sell a portion of that stake through an initial public offering (IPO). However, Vodafone's announcement does not seem to say anything about the R7.5 billion empowerment deal.
Already two consortiums have been shortlisted to take up to 5 percent in Vodacom: Mowana Five Mile, led by Nkenke Kekana, the former Telkom head of regulatory affairs; and a consortium that includes Bulelani Ngcuka, the former national prosecuting authority head.
At this stage it is not clear whether the empowerment deal will continue or if those companies will form part of the IPO.
Word in the market is that Vodafone wants to increase its Vodacom stake to as much as 65 percent and has plans to sell the rest to a local company, preferably an empowered entity.
Vodafone will have management control of Vodacom and is likely to appoint its own chief executive, since Alan Knott-Craig is planning to retire. But Vodafone's plan of selling to a local entity seem to have changed with its plans to list.
What is clear, though, is that the IPO, if it's done in the same way as Telkom's Khulisa and MTN's Asonge, will enable the company to do a broad-based empowerment deal that will find favour with the government, regulators and consumers.
There is no doubt that this time next year the market will be talking about a different Vodacom.
Vodafone might even go as far as to rebrand the firm as Vodafone Africa.
We wonder whether the corporate colours will change to Vodafone's red. There is already too much red in the cellphone industry – although in Cell C's case it might be appropriate, as the colour of its logo matches its bottom line.
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