Vodacom’s BEE holders to square debt in 2018

2014-05-25 15:00

Vodacom’s BEE shareholders now have until 2018 to repay their debt for the financing of the YeboYethu scheme.

The scheme, launched in 2008, allowed black investors to buy shares in Vodacom SA for R25 a share.

On February 3 2014, the shares started trading over the counter and on the first day, investors recorded a good return when the share price closed at R40.26.

The share price has been on the rise since then and on May 12 closed at a high of R78.95. It is currently trading at around R60.

Vodacom CFO Ivan Dittrich said: “It is really to provide more value to the participants and give them more time to settle the notional debt because the existing deal would have expired in September 2015.”

Currently, YeboYethu shareholders owe Vodacom SA about R3.1?billion, including the employee share scheme.

Vodacom spokesperson Richard Boorman said: “The interest rate reduced from just under 10% to 8%.

“To put that into perspective, commercial rates at the time that the rate was originally set [it was put in at a fixed rate] were 14%, so this was heavily discounted in favour of YeboYethu.

“Similarly, it wouldn’t be possible to get an 8% fixed-rate loan commercially today, so the rate is still discounted in favour of the scheme.”

Craig Gradidge, an investment specialist at Gradidge-Mahura Investments, said whether the terms are negative or not will depend on the performance of Vodacom South Africa.?“The dividend and special dividend together was 10c more than last year and this could mean that investors can expect larger amounts of dividends,” said Gradidge.

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