Vodacom’s Black Empowerment Company Lists in Johannesburg

  • Empowerment plans aim to benefit disadvantaged South Africans
  • Listing may boost black shareholding as spectrum sale looms

Vodacom Group Ltd.’s empowerment company, which sold stock to black South Africans at a discount in 2008, listed on the Johannesburg exchange, a move that furthers the mobile carrier’s chances of winning wireless spectrum in a proposed auction.

YeboYethu shares started trading at 55 rand Thursday, valuing the company at 792 million rand ($60 million), moving to the JSE after over-the-counter trading ended July 15. Vodacom issued 14.4 million shares to black investors at 25 rand eight years ago.

“The shares will be listed on the BEE segment of the JSE, which has the principal advantage for the company of ensuring the identity of buyers and sellers of the shares are tracked to ensure ongoing empowerment ownership,” said Morgan Jones from Bravura Consulting in Johannesburg, which renders services in respect of black economic empowerment legislation. “From the shareholders’ perspective, these listings are designed to have benefits including the potential for enhanced liquidity.”

Greater transparency of Vodacom’s black shareholding would improve the wireless carrier’s chances of winning South African high-speed internet spectrum in a proposed auction that the Independent Communications Association of South Africa, the industry’s regulator, has said may raise $1 billion early next year. Companies need 30 percent black ownership to place a bid, according to rules published by the regulator. More than 100,000 black South Africans have participated in YeboYetho, statements on its website show.

YeboYethu is the third company to be listed on the Johannesburg bourse’s empowerment section, which has a capitalization of 7.5 billion rand. “The JSE believes this will help to foster broad-based share ownership of listed companies by black shareholders,” Donna Nemer, director of capital markets, said in a statement.

Vodacom’s cross-town rival, MTN Group Ltd., was the first company to list on the empowerment section of the JSE, in November last year. The mobile operator is considering a new black economic empowerment system to replace its MTN Zakhele vehicle, which matures in November. The company has said it intends to give an update on its plans before the end of this month.

Vodacom gained 0.3 percent to 157.33 by 10:08 a.m. in Johannesburg. MTN fell 0.9 percent to 123.07 rand.

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