Vodacom BEE details
Mobile phone operator Vodacom on Tuesday released details of its R7.5bn broad based Black Economic Empowerment (BEE) transaction.
The transaction includes a public offer to the black public, black groups and Vodacom black business partners as well as participation by Vodacom’s employees and two broadbased strategic partners – Royal Bafokeng Holdings (RBH) and Thebe Investment Corporation.
The transaction is one of the largest BEE transactions in the South African information and communications technology industry.
The transaction value of R7.5bn equates to an effective 6.25% interest in Vodacom’s South African operations, Vodacom (Pty) Ltd. This values Vodacom SA at R120bn.
If the public offer is fully subscribed, the equity contribution by participants will be R900m.
As previously announced, Vodacom SA staff will participate in 25%, and the strategic black partners 45%, of the BEE transaction. Assuming that the public offer is fully subscribed, the black public will participate in 30% of the BEE transaction.
On that basis, ownership in Vodacom SA post the BEE transaction will therefore be black public 1.89%, employees 1.55% and strategic black partners 2.81%. The balance of ownership of 93.75% will continue to be held by Vodacom group, it said.
The black public offer is being made through YeboYethu Ltd, which will hold shares directly in Vodacom SA.
Black people, black controlled groups and Vodacom’s SA black business partners can participate in the black public offer. 14.4 million YeboYethu shares will be available for subscription by the black public.
Of this, 3.6 million YeboYethu shares will be reserved for Vodacom’s black business partners who are black entities forming part of Vodacom’s SA distribution network and who have been invited by Vodacom SA to participate in the offer.
The public offer opens on July 30 and closes on September 11 2008. A prospectus setting out the details of the public offer will be made available at most South African Post Office branches from July 30.
All Vodacom South African staff will participate through the YeboYethu Employee Participation Trust. The current market value of the ESOP stake is R1.875bn.
As with the black public, the staff participation will be held in YeboYethu Ltd. Allocation to employees will be based on percentage of salary, with the lower paid employees getting a higher percentage.
It is a condition that 70% of the ESOP must be in black hands and 30% in black women’s hands. 75% of the allocation is for current employees with 25% for future employees.
No upfront cash contribution is required of the employees. No dividends will be received during the term of the ESOP of seven years, which will go towards the repayment of the notional vendor finance.
"Vodacom recognises that employee participation is integral to ensuring sustained business success and enhancing our track record of retaining and developing our employees. We were thus committed to spreading a significant portion of the benefits of the BEE transaction amongst our South African staff," said CEO Alan Knott-Craig.
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