The Vodafone Group announced on Tuesday 5 September 2017 that the company’s subsidiary, Vodafone International, plans to sell 90 million shares, or a 5.2 percent stake, in South Africas’ Vodacom Group at R165 ($13) per ordinary share. The shares will be sold through an accelerated bookbuilding process and will be done in order to ensure that Vodacom can meet the requirements for its listing on the Johannesburg Stock Exchange (JSE) in South Africa.
Vodafone believes that the sale will raise gross proceeds of R14.85 billion (approximately $1,150 billion). Upon completion of the placement, Vodafone will indirectly own 1.11 billion ordinary shares in Vodacom, or about 64.5 percent of Vodacom’s ordinary share capital.
A statement released by Vodacom on Wednesday read: “The objective of the Placing was to ensure that Vodacom meets the free float requirement and to restore Vodafone’s shareholding in Vodacom to a percentage that is broadly similar to that which it held prior to implementation of the Safaricom Transaction. Vodafone remains committed to Vodacom and intends to retain a controlling majority shareholding in Vodacom for the long-term.”
In connection with the placement of the shares for sale, Vodafone has agreed not to sell, distribute or otherwise dispose of any ordinary shares in Vodacom that are not sold in the placement for a period of 90 days afterwards, subject to consent by the joint book runners. Settlement and delivery of the placement shares is expected to occur on the Johannesburg Stock Exchange on 11 September.