Vodacom Looking to Empower Black Shareholders via Stake Swap

Vodacom Looking to Empower Black Shareholders via Stake Swap

Vodacom Group is lining up a ZAR17.6 billion ($1.3 billion) empowerment transaction aimed at increasing the amount of its business held by black investors by as much as 6.35%.

South Africa’s Black Economic Empowerment (BEE) directive is aimed at addressing the exclusion of the apartheid era, and incentivises companies to increase their percentage of black shareholders, management, and employees by allowing them to bid for government tenders if they meet certain quotas.

Vodacom has not recently revealed any information on its ownership in this regard. The operator’s current empowerment agreement is due to expire in October, and the company has proposed replacing this initiative with a move that would allow its BEE partners to swap their stakes in its South African unit for a holding in its parent firm.

“Our intention was always to move our BEE investors from being shareholders in Vodacom South Africa to a shareholding at the group level thereby giving them exposure to the broader local and international markets in which Vodacom Group trades”, said Vodacom Group CEO Shameel Joosub.

This proposal would require approval from both the country’s regulator and Vodacom’s shareholders. Indeed, if the transaction goes through, Vodacom Group’s majority shareholder – Vodafone Group – will see its stake in the South African firm reduced to around 60% when new shares are made available.

Vodacom is also planning to introduce a new initiative to drive ownership across specific tiers of employees.

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