Computech Featured ICT

South Africa’s Vodacom to increase black ownership

By Giwa SHILE

South Africa’s Vodacom Group said on Monday it would increase the stake held by black shareholders by up to 6.25 per cent in a 17.5 billion rand (1.34 billion dollars) black empowerment transaction.

Vodacom Group Chief Executive, Shameel Joosub said in Johannesburg that the increase in existing scheme due to unwind in October, would raise black ownership to 20 per cent.

Joosub said the increase was to enable the current black shareholders in Vodacom South Africa and the newly formed staff scheme increase their stakes in the firm.

“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,” Joosub said.

Under black economic empowerment rules, South African companies are encouraged to meet quotas on black ownership, employment and procurement as part of a drive to reverse decades of exclusion under apartheid.

Meeting government rules on black ownership makes a company more likely to qualify for government tenders.

Petrochemicals and energy firm Sasol had in 2017, said it would cover costs and pay bank debt related to a share sale from its Inzalo black economic empowerment scheme after the share price slumped, leaving investors unable to fully repay their debts.

Companies in South Africa are required to help increase black ownership, often using vendor financing deals to sell shares to groups excluded before 1994 under apartheid’s white minority rule.

Related posts

Group decries Canadian Government’s refusal of landing right to Air Peace

Abisola THOMPSON 

Abdulwahid Islamic Foundation sets for Annual Ramadan Lecture, Special Prayers for Nation

Our Reporter

In dire need of Funds to import equipment, offer services aviation agencies move to stop 25% annual remittances to FG

Our Reporter

Tension as U.S. moves to name Boko Haram sponsors

Our Reporter

Global COVID-19 fundraising meeting raises $6.9 bn

Meletus EZE

NDDC sued over alleged failure to present 2020 budget breakdown

Our Reporter