|[Published: Wednesday June 13 2018]
South Africa's Vodacom to increase black ownership
JOHANNESBURG, 13 June. - (ANA) - Vodacom said current black shareholders in Vodacom South Africa and a newly formed staff scheme will exchange their current shareholding for a stake of between 5.8% and 6.25% in Vodacom Group.
The new YeboYethu empowerment structure would acquire a 6.25% shareholding in Vodacom Group based on an illustrative price of 152.50 rand per Vodacom Group share.
Under black economic empowerment rules, South African companies are encouraged to meet quotas on black ownership, employment and procurement as part of a drive to reverse decades of exclusion under apartheid.
Increase ownership to 20%
Meeting government rules on black ownership makes a company more likely to qualify for government tenders.
The existing scheme, that is due to unwind in October and will increase Vodacom Group’s black ownership to 20%, delivered a return of 7.5 billion rand ($575 million), the firm said.
"This amounts to 6.7 times the original capital that was invested into the deal in 2008 and therefore has been one of the most profitable and successful transactions concluded in South Africa," said Vodacom Group Chief Executive Shameel Joosub.
Petrochemicals and energy firm Sasol last year said it would cover costs and pay bank debt related to a share sale from its Inzalo black economic empowerment scheme after the share price slumped, leaving investors unable to fully repay their debts.
Companies in Africa's most advanced economy are required to help increase black ownership, often using vendor financing deals to sell shares to groups who were excluded before 1994 under apartheid's white minority rule. - (ANA) -
AB/ANA/13 June 2018 - - -