Last hurdle cleared for Vodacom sale

By Martin Czernowalow for Telkom

Johannesburg, 04 May 2009

Fixed-line operator Telkom said this morning it is pleased an application in the Pretoria High Court by the Communication Workers' Union (CWU) has been dismissed, meaning it can proceed with exiting Vodacom.

On 17 April, the union filed the application to interdict Telkom from proceeding to implement the proposed sale and unbundling of Telkom's shares in Vodacom. According to a Telkom statement, the application was dismissed with costs last Thursday.

The deal, the terms of which were finalised at the beginning of this year, would see end of a joint 50:50 shareholding in Vodacom by Telkom and UK-based telecommunications giant Vodafone. The R22.5 billion deal will see Vodafone take an additional stake in Vodacom, with the remainder of the stake being unbundled.

Vodacom is expected to list on the JSE in two weeks' time. The company was initially supposed to list today, however, this had been pushed back due to a delay in obtaining all necessary regulatory approvals.

However, the CWU has been adamant that the sale should never have been considered, since Vodacom is a national asset and should not be placed in the hands of a foreign business. The union also maintains it was never consulted on the process, despite agreements in place that required Telkom and Vodafone to do so.

“We had no other option but to use the law to force all parties to properly consult CWU, as we have members in both Telkom and Vodacom,” CWU secretary general Gallant Roberts said at the time of the court application.

All three companies involved in the deal have maintained the unions have been consulted on each step of the process. However, the union is adamant it has battled for information from the companies since the start of the process.