Vodafone on BEE

JOHANNESBURG – Vodafone Group Plc is in talks to sell part of its 50 per cent stake in South African cell phone operator Vodacom to black investors to meet government affirmative action quotas.

A Vodafone spokesman said the world’s biggest cell phone company by sales had met a number of South African black investment groups but would wait until industry guidelines had been finalised before setting a deal. “We are committed to broad-based black empowerment and have held preliminary discussions with a number of BEE consortia,” the spokesman said.”Once the codes and charter are finalised we would expect to conclude a deal.”South Africa is pressing companies to meet quotas on black ownership, employment and procurement as part of a massive affirmative-action plan aimed at shifting more of the white-controlled economy into the hands of the black majority, more than a decade after the demise of apartheid.Prominent South African politician-turned-businessman Saki Macozoma, who is deputy chairman of Africa’s biggest bank, Standard Bank, is among those vying for the prized Vodacom stake, a source close to Macozoma told Reuters .”My understanding is that Saki Macozoma is putting together a broad-based Black Economic Empowerment consortium in regard to Vodacom,” the source said.”There have been informal talks among several groups in the matter and Vodafone is very keen that Vodacom must have good BEE credentials.”Vodacom declined to comment on the issue and Vodafone said it was too early to divulge details.British-based Vodafone is finalising a deal to raise its stake in Vodacom to 50 per cent by buying South Africa’s VenFin, pocketing the investment firm’s 15 per cent stake in the cell-phone company, and spinning off its other assets.The US$2,4 billion deal is the second-biggest foreign direct investment in post-apartheid South Africa, valuing Vodacom at a 25 per cent premium to earlier estimates and putting Vodafone on an equal footing with 50-per cent shareholder Telkom.The premium reflects keen demand for African telecom stocks as European and Middle Eastern companies turn to some of the world’s last major untapped markets to offset sluggish growth at home, and has thrown the spotlight on Vodacom as a prized asset.South Africa’s communications industry has drawn up a draft empowerment charter under which telecom, IT and media companies should strive for 30 per cent black ownership.Given state-controlled Telkom’s strong empowerment credentials, and Vodafone’s special status as a foreign company, it is not clear how the guidelines – which have yet to be finalised – would apply to Vodacom.One analyst speculated another top black businessman and African National Congress party insider, Tokyo Sexwale, could also be eyeing a deal.- Nampa-Reuters”We are committed to broad-based black empowerment and have held preliminary discussions with a number of BEE consortia,” the spokesman said.”Once the codes and charter are finalised we would expect to conclude a deal.”South Africa is pressing companies to meet quotas on black ownership, employment and procurement as part of a massive affirmative-action plan aimed at shifting more of the white-controlled economy into the hands of the black majority, more than a decade after the demise of apartheid.Prominent South African politician-turned-businessman Saki Macozoma, who is deputy chairman of Africa’s biggest bank, Standard Bank, is among those vying for the prized Vodacom stake, a source close to Macozoma told Reuters .”My understanding is that Saki Macozoma is putting together a broad-based Black Economic Empowerment consortium in regard to Vodacom,” the source said.”There have been informal talks among several groups in the matter and Vodafone is very keen that Vodacom must have good BEE credentials.”Vodacom declined to comment on the issue and Vodafone said it was too early to divulge details.British-based Vodafone is finalising a deal to raise its stake in Vodacom to 50 per cent by buying South Africa’s VenFin, pocketing the investment firm’s 15 per cent stake in the cell-phone company, and spinning off its other assets.The US$2,4 billion deal is the second-biggest foreign direct investment in post-apartheid South Africa, valuing Vodacom at a 25 per cent premium to earlier estimates and putting Vodafone on an equal footing with 50-per cent shareholder Telkom.The premium reflects keen demand for African telecom stocks as European and Middle Eastern companies turn to some of the world’s last major untapped markets to offset sluggish growth at home, and has thrown the spotlight on Vodacom as a prized asset.South Africa’s communications industry has drawn up a draft empowerment charter under which telecom, IT and media companies should strive for 30 per cent black ownership.Given state-controlled Telkom’s strong empowerment credentials, and Vodafone’s special status as a foreign company, it is not clear how the guidelines – which have yet to be finalised – would apply to Vodacom.One analyst speculated another top black businessman and African National Congress party insider, Tokyo Sexwale, could also be eyeing a deal.- Nampa-Reuters

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