Cellular network operator Vodacom is determined its maiden listing will go ahead Monday despite a sudden about turn by communications regulator ICASA revoking approval that threatens to scupper the R22.5 billion deal.
“Whilst Vodacom is seeking legal council, until a decision to the contrary is made, the listing is on track to take place on Monday,” was the curt statement issued by Vodacom following ICASA's earlier bombshell announcement.
Vodacom is due to list on Monday, 18 May, some 35% of its shares following Telkom unbundling of its 50% stake. In terms of the deal, UK group Vodafone will take a direct 65% stake in Vodacom and the rest will be listed on the Johannesburg Stock Exchange.
ICASA statement says that its council had decided to rescind the previous decision because of the court action brought against the transaction by the Congress of SA Trade Unions (COSATU).
“Whereas the Authority awaits the Court outcome on its decision, it is concerned that the Court proceedings will only commence long after the transaction has taken place,” the statement says.
ICASA CEO Karabo Motlane says the authority expects that Vodacom will adhere to the new decision and not list on Monday.
“Our other alternative is to seek an urgent interdict, but I don't think this will be necessary,” he says.
Dominic Cull, of Ellipsis Regulatory Solutions says that Vodacom's application for ICASA's approval had been filed under the “Ownership and Control Regulations” that were written for the defunct Telecommunications Act.
The Electronic Communications Act replaced that law in 2006, but the new regulations concerning ownership and control have not been written by ICASA yet. The original regulations stipulate that ICASA's approval was needed in any change in ownership or control in a “concentrated market” - meaning a sector that had very limited competition.
“What Vodacom said to ICASA was that this no longer applied as the new telecommunications landscape is now no longer a concentrated market as there are more than 300 individual electronic communications networks service licensees out there,” Cull says.
I-ECNS is the new term for the telecommunications operators who run infrastructure such as Telkom and Vodacom.
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