Current black shareholding in South African mobile communications company Vodacom will increase for a stake of between 5.8 percent and 6.25 percent in a 17.5 billion rand ($1.34 billion) black empowerment transaction.
Vodacom group in a statement on Monday announced that a newly formed staff scheme will see to the increase of the stake held by black shareholders in the leading pan-African corporate connectivity and telecommunications company.
The new empowerment structure called YeboYethu would see to the acquisition of the shareholding based on an illustrative price of 152.50 rand per Vodacom Group share. The scheme is intended to support incremental broad-based BEE (black economic empowerment) and ownership in Vodacom, the group said in the statement.
YeboYethu is to replace an existing scheme that is due to unwind in October and will increase Vodacom Group’s black ownership to 20%. The existing scheme delivered a return of 7.5 billion rand ($575 million).
Vodacom Group Chief Executive Shameel Joosub 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.”
South African government has been pushing black ownership agenda since it launched a racially selective programme called Black Economic Empowerment (BEE), which seeks to redress the inequalities of Apartheid by giving black (Blacks, Coloureds and Indians) South African citizens economic privileges previously not available to them under White rule.
South African companies are expected to support the government’s Affirmative Action that seeks to reverse decades of exclusion under apartheid in Africa’s most industrialized economy by meeting quotas on black ownership, employment and procurement under the black economic empowerment rules. Companies that comply with the government rules on black ownership stand to benefit more as they are likely positioned and qualified to bid for government projects.