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.<\/p>\n
Vodafone owns 50 percent of Vodacom and plans to buy the remaining 50 percent from Telkom.<\/p>\n
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. <\/p>\n
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. <\/p>\n
At this stage it is not clear whether the empowerment deal will continue or if those companies will form part of the IPO. <\/p>\n
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. <\/p>\n
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.<\/p>\n
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. <\/p>\n
There is no doubt that this time next year the market will be talking about a different Vodacom.<\/p>\n
Vodafone might even go as far as to rebrand the firm as Vodafone Africa. <\/p>\n
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.<\/p>\n