[South Africa] Absa CIB advises YeboYethu on Vodacom BEE deal
Absa Corporate and Investment Banking (CIB) has been part of the recently announced Vodacom YeboYethu BEE deal in which it acted as the sole financial advisor to JSE listed empowerment group YeboYethu to conclude what is the largest ever such transaction in the ICT sector in South Africa.
The empowerment transaction negotiated by YeboYethu and advised on by Absa, is bringing possibilities to life for thousands of South Africans by providing real empowerment - a material and immediate cash dividend to shareholders, as well as a new and enlarged investment at the JSE listed Vodacom Group level – a significant benefit to all its empowerment shareholders.
YeboYethu will be the third largest shareholder in Vodacom Group holding a 6.23% shareholding which is the largest empowerment transaction in the ICT sector.
In addition, Absa is one of the co-funders of the R16.41bn BEE transaction demonstrating Absa’s commitment to backing its clients and furthering real and meaningful empowerment in South Africa.
Craig Brewer, Co-head for Banking at Absa CIB says that the YeboYethu/Vodacom empowerment transaction provides real economic returns to the 82 000 YeboYethu shareholders with a special cash dividend in excess of R3,2bn and thereafter, the YeboYethu shareholders retain all their shares and through YeboYethu, have an ongoing investment in the leading mobile operator in Africa. He says YeboYethu, which is listed on the JSE’s BEE Board, now has a more direct reference price to its investment in that it is invested directly into JSE listed Vodacom Group.
“YeboYethu is one of the most successful BEE structures and companies in South Africa and this transaction provides an opportunity for shareholders to continue this success and reinvest for a further 10 years whilst providing a material cash payment to shareholders now,” Brewer says. “This is real empowerment. The reaction and participation by YeboYethu shareholders at the shareholder meetings, and their engagement on the intricacies of the transaction and subsequent vote in favour, is a true demonstration of what can be achieved through correctly structured empowerment transactions.
It is real benefits and value creation for these shareholders with an ongoing investment in a listed asset with telecommunication businesses in South Africa and across Africa,” he says.
Brewer says Absa CIB has a wealth of telecommunications experience in both South Africa and Africa, and also as a Pan-Africa bank significant experience in BEE and local ownership requirements across the continent.