Vodacom just announced a R3 billion payday for its BEE investors – here’s how its YeboYethu scheme w
BUSINESS INSIDER / 11 JUNE 2018 - 09.34 / PHILLIP DE WET
Vodacom's 2008 empowerment transaction, YeboYethu, is unwinding in October.
Participants will share in a cash windfall of more than R3 billion, around 2.7 times what they invested.
The company is putting R4.2 billion towards a successor scheme. Here's how it will work.
By the time its YeboYethu black economic empowerment (BEE) scheme is unwound there will be R3 billion in dividends for participants to share, Vodacom said on Monday morning.
At a dividend of R67.28 per share, that represents a return of 2.7 times on their original investment, Vodacom said.
And that is on top of the shares, now in the Vodacom international group rather than Vodacom SA, that empowerment shareholders will continue to hang on to.
These 4 simple cartoons explain Vodacom’s complicated new YeboYethu BEE deal, worth R17.5 billion
YeboYethu is due to unwind in October.
In its place, Vodacom intends to create a new, 10-year empowerment scheme it estimates to be worth R17.5 billion.
This is what the current' empowerment structure looks like:
Vodacom's existing BEE structure. (YeboYethu)
Vodacom's employee share ownership scheme (ESOP), also known as Siyanda, was a major component of the old YeboYethu, with Royal Bafokeng Holdings and Thebe Investment Corporation as separate, direct empowerment investors.
The empowerment investment was into Vodacom South Africa, excluding the group's international operations.
That structure will change dramatically in a complex series of transactions.
Vodacom will inject what it estimates to be R4.2 billion in "economic value" into the new scheme. The new YeboYethu is also due to raise R5.8 billion from third-party funders.
After a great deal of swapping of different share types, the final new structure is due to look like this:
Vodacom's planned new BEE structure. (YeboYethu)
The new YeboYethu is due to consolidate Vodacom's empowerment shareholders, with Royal Bafokeng and Thebe sitting alongside the public and Vodacom employees. By way of an investment company, YeboYethu will own 6% of the Vodacom group – rather than shares in just the South African operation.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER