May 2009

After the first day of trading today on JSE(Johannesburg Stock Exchange), it closed at R58.80(about Kes:524.00) per share.
Currently Vodacom is owned 50% by Telkom and 50% by Vodafone.

The listing of the company forms part of a number of interconditional transactions including the sale by Telkom of a 15% stake in Vodacom to Vodafone for a net sum of R20.95bn, increasing Vodafone’s interest in the company to 65% and, following the listing, the unbundling by Telkom to its s hareholders of its remaining 35% in Vodacom.

Vodacom was formed in 1993 and has developed into the leading SA mobile company and related services with some 38 million customers as at 31 December 2008. Its also the largest provider of mobile broadband services in South Africa with more than 600,000 customers. The recent opening of a data centre in Johannesburg, a client services operation centre and recent acquisition of Storage Technologies Services (“StorTech”) and Gateway Communications (“Gateway”) affords Vodacom a solid platform to further develop its ICT business.

Vodacom also promises to selectively evaluate further license and acquisition opportunities within the sub-Saharan African region, where shareholder value can be created. The recent acquisition of Gateway provides Vodacom with an established platform into Africa on which to benefit from the further growth in demand for carrier connectivity and high quality corporate telecommunications services. Being majority owned by Vodafone(65%), Vodacom will benefit from access to Vodafone’s expertise, product innovation, marketing and centralised procurement. Vodafone has agreed that Vodacom will be its exclusive expansion vehicle in sub-Saharan Africa. Vodacom anticipates a dividend payout ratio of about 40% of headline earnings for the year ended 31 March 2010. Dividends will be paid semi-annually with the first dividend payable for the first half of 2010.

The listing of Vodacom Group will not have any impact on the BEE shareholding interests in Vodacom SA. The Black Public interest held in YeboYethu will remain at 3.44% in Vodacom SA, as part of the 6.25% overall BEE stake. This is a key requirement of doing business in South Africa with the Black Economic Empowerment(BEE) requirements.

The listing almost never took place with a last minute application was brought by the Congress of South African Trade Unions (Cosatu) supported by the Independent Communications Authority of SA (Icasa). The application for an urgent interdict to halt the listing and to prevent Telkom selling the 15% to Vodafone provoked widespread concern that the new government’s left-wing leanings would harm SA’s business credibility.
However this application was overthrown and the listing goes ahead today. Analysts believe Vodacom is worth R70bn-R80bn. Vodacom’s shares will be distributed to the thousands of ordinary people who already own Telkom shares, meaning that many citizens will also now gain a direct stake in the lucrative cellular network.
More on the Vodacom Listing here.