Alternative telecommunications operator Vox Telecom today announced a significant BEE deal which will see the ALT-X listed group increase its black ownership to around 41,5%.
The Mvelaphanda Group and Regiments Capital are both due to take new stakes in the group, while the Lereko Metier Capital Growth Fund (LMCGF) will increase its shareholding from 19,2% to 23,4%.
The various transactions that have been entered into by Vox Telecom combine a new share issue to cover the recent acquisition of Storm Telecom and Absa Internet Access (AIA) as well as a sale of shares by existing shareholders Vantage Capital and Metier. The new issue of shares is subject to the approval of the Competition Commission and the SA Reserve Bank, while the sale of shares by existing shareholders will be completed on 15 November.
The Mvelaphanda Group is South Africa’s pre-eminent broad based and black-controlled, owned and managed diversified group. It holds investments in a range of companies operating in financial services, consumer services, construction and infrastructure, non-mining resources and energy as well as the telecoms, media and technology areas. Following the vendor consideration placing and an additional purchase of shares, the Group will hold approximately 12,3% of Vox Telecom’s enlarged issued share capital.
“The Mvelaphanda Group has chosen Vox Telecom as a key focus of its investment in the provision of voice and data services to the telecommunications market,” says Yolanda Cuba, CEO of Mvelaphanda. “Vox Telecom will become the vehicle for our investment strategy in this industry in the African region.”
Regiments Capital, an independent BEE financial services and investment company, will hold approximately 4.2% of the enlarged issued share capital of Vox Telecom after the transactions.
“We are excited to be part of this transaction,” says Executive Chairman Litha Nyhonyha. “This is a strategic investment for Regiments Capital as it facilitates our growth and footprint in the telecoms sector. Vox Telecom is the right partner for us because management has demonstrated a good understanding of convergence in the Voice over IP space.”
The Lereko Metier Capital Growth Fund (LMCGF) will increase its current Vox Telecom shareholding from approximately 19.2% to approximately 23.4% of the enlarged issued share capital. The pioneering black-led private equity fund is one of the largest pools of private equity capital in South Africa, and the largest in terms of local institutional commitments. Its principals are Popo Molefe, Thierry Dalais, Valli Moosa, Paul Botha, Lulu Gwagwa and Anthony Hewat.
LMCGF’s CEO Thierry Dalais says expanding the fund’s existing investment in the Vox Telecom group was an easy decision.
"It was logical for the Lereko Metier Fund to increase its commitment to Vox Telecom. We like what it is doing and this is in line with the original investment hypothesis. Our role in facilitating the entry of fellow reference shareholders like Mvela and Regiments is good for all stakeholders, and we trust that they will bring more than money to the equation. The firm today has deep black empowerment credentials and a committed and invested management team.”
Vox Telecom Executive Chairman Tony van Marken says Vox Telecom’s BEE strategy, including increased black shareholding and the inclusion of BEE groups, is critical to its future success. “Our new shareholders will further improve our BEE credentials, facilitate our licensing obligations and enable us to further grow our business in the corporate and government sector.”
Van Marken adds that the new partners are also expected to play a key role in supporting strategic acquisitions and potential joint ventures with regional players. “Our stated strategy is to become the leading independent alternative telecommunications service provider in Southern Africa and we hope that as we expand further in the SADC region our BEE partners will play an increasingly important part in supporting that goal."