Vodafone confirms empowerment talks

By Damaria Senne, ITWeb senior journalist

Johannesburg, 01 Feb 2006

A Vodafone Group spokesperson has confirmed that the company is engaged in talks with interested parties regarding the sale of 5% of its stake in the Vodacom Group.

The stake is estimated to be worth over R5 billion and is earmarked for purchase by a black economic empowerment (BEE) partner.

According to spokesperson Ben Pandovan, the group is waiting for the ICT empowerment charter and the Department of Trade and Industry`s Codes of Good Practice to be finalised, to provide clarity on how equity ownerships will be measured. The DTI codes were published on 20 December and are undergoing a 60-day commentary period.

Pandovan notes that discussions with interested parties are conducted with the full knowledge of both Vodacom and 50% shareholder Telkom. He says discussions are at a preliminary stage and it would be premature to disclose the interested parties. However, the group is trying to be as open as possible, he adds.

Empowering workers

Mfanafuthi Sithebe, communications head of the Communications Workers Union, says the union`s investment wing does not rule out the possibility of purchasing a stake in Vodacom. He says it is in discussions with a number of potential investors who could assist with such a purchase.

Irnest Kaplan, an independent analyst and MD of Kaplan Equity Analysts, says the key challenge for a potential purchaser lies in financing the deal. He notes that the Vodafone stake is a "very sizeable investment" and whoever ends up with it would need to raise large amounts of capital.

However, Sithebe is undaunted by the challenge of raising funds. He argues that state institutions such as the Public Investment Corporation and the Development Bank of Southern Africa have a role to play and should provide assistance when required.

Equitable ownership

Sithebe emphasises the need for equitable ownership in the ICT sector. He says 5% of Vodacom is not enough in terms of ensuring that ownership of the group reflects the demographics of the country.

He says the union is willing to meet with the Vodafone Group to outline what it would consider equitable ownership. However, the ICT charter and DTI codes must serve as firm guidelines for this process, he says.

Industry speculation has hinted that interested parties may include the Elephant Consortium headed by Dimension Data chairperson Andile Ngcaba, former Vodacom chairperson Wendy Luhabe, head of ANC presidency Smuts Ngonyama and Women Investment Portfolio Holdings.