YeboYethu delivers a significant return on its investment and continues as Vodacom Group's ongoing BEE partner

JOHANNESBURG – YeboYethu shareholders stand to benefit when Vodacom SA’s (“VSA”) 2008 BEE transaction, initially valued at circa R7.5 billion, is scheduled to unwind as part of a new Vodacom Group BEE transaction. As a result, approximately 82 800 black investors will receive a significant cash dividend pay-out and acquire a larger shareholding now in JSE listed Vodacom Group, providing exposure to Vodacom’s local and international operations, which will enhance the liquidity in the YeboYethu share listed on the JSE BEE Board.

The new BEE transaction, valued at circa R17.5 billion, will have a 10 year term where YeboYethu will continue to partner with Vodacom Group as its BEE partner. It is the largest BEE transaction in the ICT sector, giving YeboYethu increased involvement as Vodacom Group’s BEE partner. Post the transaction YeboYethu would likely become Vodacom Group’s third largest shareholder.

Zarina Bassa, Chairman of YeboYethu said:

“These are exciting times for YeboYethu shareholders as we continue to invest in the next 10 years, building on what we have already achieved over the last 10 years with an increased involvement as Vodacom Group’s BEE partner, in the largest BEE transaction in the ICT sector. The board is unanimously supportive of the transaction as it creates immediate value now for the more than 82 800 black investors through the cash dividend and importantly, an opportunity to reinvest on favourable terms in the Vodacom Group.”
Commenting on the new BEE transaction, Vodacom Group CEO Shameel Joosub, said:
“Vodacom is committed to transformation and broad-based BEE in South Africa. The circa R17.5 billion BEE transaction provides an ideal opportunity for Vodacom to partner with our existing broad-based BEE partners and Vodacom staff in facilitating a further BEE ownership transaction, this time at the Vodacom Group level. The transaction will sustain Vodacom’s BEE ownership for the next 10 years and underscores our commitment to broad-based empowerment and transforming our equity ownership in order to reflect the demographics of South Africa.”

The transaction provides a number of benefits to a YeboYethu shareholder including:

• Substantial cash dividend paid to YeboYethu shareholders in the amount of c.R1.56bn or c.R67 per share, which is 2.7x their original investment into the VSA BEE deal;
• Transaction delivers c.R7.5bn of net value to VSA BEE shareholders from the 2008 transaction, which is 6.7x the original capital BEE shareholders invested into the deal;
• Exposure to Vodacom Group at the JSE listed level which includes both SA and non-SA operations (incl Safaricom);
• Consolidation and flip-up through YeboYethu provides direct access to Vodacom Group shares creating a more clear reference price for YeboYethu shareholders to realise value over time; and
• Ability for YeboYethu shareholders to continue trading their shares on the JSE with no restriction on trading.

Established in 2008, YeboYethu was designed with the express intention of providing true grassroots empowerment. YeboYethu issued 14.4 million YeboYethu Ordinary Shares at R25 each and as a result of the public offer, approximately 102 000 qualifying black investors bought a stake in Vodacom SA. At the time of implementation of the Vodacom SA BEE Transaction, valued at R7.5 billion, it was one of the largest empowerment schemes in the telecommunications industry, resulting in YeboYethu owning 3.44% of Vodacom SA.

Between February 2014 and July 2016, these shares changed hands on the YeboYethu OTC trading platform and started trading at R55.50 on the JSE’s BEE board on 11 August 2016. The closing price on the JSE’s BEE Board on Friday, 8 June 2018 was R84,50 per share, excellent growth from the original R25 per share when the scheme commenced in 2008.

YeboYethu shareholders will have the opportunity to vote on and approve the transaction at a general meeting of shareholders which is expected to be held on 17 August 2018. Ahead of the general meeting YeboYethu will conduct various awareness and information campaigns for shareholders.  Details of these will be communicated in due course or can be found on www.yeboyethu.co.za.