Vodacom's YeboYethu Offer a Huge Hit
YeboYethu, a specially-created sub-company of mobile telecom provider Vodacom, has sold out of all available shares, with demand at three times the volume of supply. The shares must be held for five years, as is detailed below.
("Yebo" means "yes" in Zulu; "Yethu" means "ours" in Xhosa- those are the two dominant tribal languages in South Africa, and are counted amongst the nation's eleven official languages)
"Vodacom's black economic empowerment transaction, which includes the YeboYethu public offer, has been a huge success and I'm pleased to say has surpassed our expectations," said company chief executive Alan Knott-Craig in a statement.
"Our goal in structuring this transaction was to promote truly broad-based empowerment, and the overwhelming public response, particularly at the minimum investment level, means that we have achieved this goal."
The company was incorporated for the specific purpose of acquiring an interest in Vodacom SA. The shares are not listed on any exchange. YeboYethu is a ring-fenced limited purpose vehicle whose sole purpose is to buy and hold Vodacom SA ordinary shares and Vodacom SA A shares for the benefit of shareholders
Shareholders who have purchased through the YeboYethu offer are obliged to hold their stake for a minimum of five years. However, the shares held by YeboYethu will not be traded during that time.
After five years, sale of the shares will be permitted; however, it will be restricted to black ownership only. After 10 years, there will no longer be any restriction on the sale and purchase of the shares.
Vodacom has made provision for oversubscription of the share offer, in its prospectus. It states: “If more than 14.4 million shares are applied for, Vodacom SA will decide how to allocate the shares. Preference will be given to Vodacom SA black business partners, black women and black groups with the highest percentage black ownership.”
"AfriForum will monitor whether the shares will indeed be allocated and will take legal action if the shares are not allocated," it said in statement.
According to YeboYethu's rules, "black" people refers to Africans, Indians, and Chinese individuals.
Kriel said that no legal framework exists in terms of which Vodacom can claim that impoverished residents of Bethlehem are not Africans.
"Applicants will be notified of the amount of shares allocated to them within the next few weeks and refunds for those shares applied for but not allocated will be processed at the same time," Vodacom said.