Vodacom staff win battle

ADSL South Africa (Broadband South Africa), 20 March 2007

A 1/4 or 25% of the proposed R7.5 billion BEE (Black Economic Empowerment) transaction will be allocated to all Vodacom employees (4 300). This is after Vodacom staff have won a three-year battle to be allocated shares.

Alan Knott-Craig, Vodacom South Africa’s Chief Executive, on Wednesday ‘…told employees that the board had decided to allocate 25 percent of the R7.5 billion deal to all employees’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

How much will the allocated shares cost Vodacom employees?

It will cost them about R2 billion which represents about 2% of Vodacom. No details are yet available on what a single allocated share will cost, but it should be at a discounted price.

Why can’t you give us the exact figures?

It’s difficult at best to give the exact figures because ‘Vodacom has not revealed how much of a stake the R7.5 billion represents, but it was expected that the group would sell 7.5 percent to black partners’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

In other words, one can at best estimate, based on the 7.5% figure, that Vodacom employees will own about 2% of the company.

How will Vodacom’s 7.5% BEE cake be sliced?

A slice of 25% will go to Vodacom’s staff, 25% to broad-based entities and 50% to strategic partners. This ‘…is according to a source familiar with the transaction…’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

‘Vodacom has received about 60 proposals from black entities including Mowana Five Mile, a consortium led by Nat Kekana and Sbu Mngadi, and has appointed Rand Merchant Bank to facilitate the transaction. Shortlisted candidates are expected to be announced in the next few weeks’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

Have all Vodacom employees welcomed the 25% share allocation?

Yes, but some are unhappy about the fact that Vodacom haven’t ‘…sold the shares to employees three years ago when Hosken Consolidated Investments disposed of its 5 percent stake’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

‘The stake, which was then worth R1.5 billion, was sold to then shareholder VenFin and current shareholder Vodafone. Vodafone owns 50 percent of Vodacom and the other 50 percent is owned by Telkom’ (Vodacom staff win three-year battle for shares, Mochiko, Business Report, 16 March 2007).

In other words, employers will now have to pay more for fewer shares.

ADSL South Africa (Broadband South Africa) welcomes Vodacom’s decision to allocate shares to its employees at last. Great companies give their employees the chance to become owners.