Vodacom is set to list on the main board of the JSE on 5 May. This will be confirmed if all conditions relating to the sale of a 15% stake in the company to Vodafone are met and approved by Telkom shareholders later this month.
The cellular operator today posted a pre-lising statement setting out the timelines relating to its listing, as well as the investment case for Vodacom.
Vodacom is currently owned 50% by Telkom and 50% by Vodafone Group. The listing of the company forms part of a number of interconditional transactions including the sale by Telkom of a 15% stake in Vodacom to Vodafone, increasing Vodafone's interest in the company to 65% and, following the listing, the unbundling by Telkom to its shareholders of its remaining 35% in Vodacom.
Pieter Uys, CEO of Vodacom Group, comments: "The listing of Vodacom will offer investors direct access to a well established communications company with a unique platform for growth. This is an important event in the history of the company as we become a public company whilst also continuing to benefit from being part of the Vodafone Group."
Since its formation in 1993, Vodacom has developed into a leading African communications group providing mobile communications and related services to about 38-million customers as at 31 December 2008.
The company has clear strategies for growth to maintain its leading position within its existing markets and to expand profitably into new products, services and geographies, according to Uys.
"We are committed to entrenching our position as a leader in the markets in which we operate. We will do this by continuing to provide a first rate service to our customers and offering new and innovative products. We will continue to invest in technology to support growth as well as become more efficient."
Vodacom's strategy is to be a leading total communications provider in sub-Saharan Africa. As well as continuing to grow its core mobile business, Vodacom's growth strategy is to lead in broadband connectivity and data services and to develop its converged services offering to consumers and corporate customers.
The company is already the largest provider of mobile broadband services in South Africa with more than 600 000 customers. It recently opened a data centre in Johannesburg and a client services operation centre. In addition, it has acquired Storage Technologies Services (StorTech) and Gateway Communications to further develop its ICT business.
Vodacom is also seeking out new growth opportunities in the media, entertainment and mobile advertising sectors as well as in mobile financial services.
It will also continue to selectively evaluate further licence and acquisition opportunities within the sub-Saharan African region, where shareholder value can be created. The recent acquisition of Gateway provides Vodacom with an established platform into Africa on which to benefit from the further growth in demand for carrier connectivity and high quality corporate telecommunications services.
In addition, Vodafone has agreed to use Vodacom as its exclusive investment vehicle in sub-Saharan Africa from the effective date of the listing.
"Vodacom has many qualities which will contribute towards our growth objectives. Apart from our existing footprint and leading market positions, we have the number one telecommunications brand in South Africa, " says Uys. "We have high quality networks and coverage, having led in the deployment of many new technologies. We have an unparalleled track record of innovation. We have an extensive distribution network with some 25,000 points of sale in South Africa alone. I believe we are very well positioned for the future."
Being majority owned by Vodafone, Vodacom will benefit from access to Vodafone's expertise, product innovation, marketing and centralised procurement. Vodafone has agreed that Vodacom will be its exclusive expansion vehicle in sub-Saharan Africa.
Vodacom anticipates a dividend payout ratio of about 40% of headline earnings for the year ended 31 March 2010. Dividends will be paid semi-annually with the first dividend payable for the first half of 2010.
As it becomes a public company, there will be some changes to the board of directors, which will consist of 13 directors: 10 non-executive and four of those independet bnon-executive directors.
The non-executive chairman will be Peter Moyo, formerly CEO of Alexander Forbes Limited and deputy MD of Old Mutual Life Assurance Company South Africa. The other independent non-executive directors are Thoko Mokgosi-Mwantembe, former CEO of Hewlett-Packard SA; Phuti Malabie, MD of Shanduka Energy; and Tom Boardman, CEO of Nedbank. The appointments of Peter Moyo and Thoko Mokgosi-Mwantembe to the Vodacom board are effective from the date of listing.
One director shall be nominated by the government for so long as it holds not less than 10% of the issued Vodacom Group shares.