Rostam offloads Vodacom equity for a cool Sh387 billion

Dar es Salaam. Cavalry Holdings, the Jersey island-registered company that owned a 35 per cent stake in Vodacom Tanzania, has sold 17.2 per cent shares in a transaction worth $242 million (Sh387 billion).

 If approved by the South African Reserve Bank, the deal would increase Vodacom Group’s shares from the current 65 per cent to 82.2 per cent.

According to details obtained by the Citizen yesterday, Vodacom Group purchased the shares from Cavalry Holdings that owned a 35 per cent stake in Vodacom Tanzania through Mirambo Limited.

The deal will see Cavalry Holdings pocket $242 million (Sh387 billion).

Registered in Jersey Islands, Cavalry is a private investment company.

Sourced close to Mirambo Holdings confirmed the deal yesterday, saying the money would be injected into the holding company to re-capitalise the business and settle debts owed to the Vodacom Group.

“It is true that the deal has taken place. It is a subscription for new equity to be injected into Cavalry,” the source said.

The South Africa-based Vodacom Group’s shareholding prior to the deal, which was transacted on Tuesday, was 65 per cent. The new stake would increase its shareholding to 82.2 per cent.

The statement issued by the Johannesburg Stock Exchange-listed Telecoms giant further said the acquisition of the 17.2 per cent stake would be done through subscription and give the group indirect ownership of the shares.

The transaction is expected to close before the end of the financial year.

Mirambo Limited, which is owned by Tanzanian businessman Rostam Aziz, will retain its shareholding in Vodacom Tanzania at 17.8 per cent.

“Vodacom Tanzania has been Vodacom’s most successful investment outside of South Africa to date,” the JSE-listed company said in a statement.

The transaction is subject to approval by the South African Reserve Bank, Vodacom Group’s statement said.

Efforts to get a comment from Tanzanian authorities proved futile.

The director general of the Tanzania Communications Regulatory Authority, Prof John Nkoma, when reached for comment told The Citizen to contact the ministry of Communications, Science and Technology.

Telephone calls to the ministry went unanswered.

Vodacom Tanzania, has 10 million mobile customers, and reported a 19.1 per cent rise in service revenue during the six months to September 30.

Tanzania’s telecoms market has a mobile penetration of 57 per cent and is said to be one of the most lucrative market in the region.

By June Vodacom Tanzania controlled 36 per cent of the mobile telephone market share, followed by Airtel (32 per cent), Tigo (24 per cent), Zantel (7 per cent), and Benson (1 per cent).

A unit of Britain’s Vodafone, Vodacom Group is the most popular mobile operator in South African. 

The company also has a presence in Mozambique, Lesotho, Nigeria and the Democratic Republic of Congo. Vodafone, which is increasing investments in Europe, India and Africa after exiting the US, owns 65 per cent of Vodacom.

“The transaction allows Vodacom to increase its exposure to one of Vodacom’s key investments in sub-Saharan Africa,” Vodacom Group said in the statement.

Vodacom Tanzania started operations in August 2000 after winning the bid to operate a GSM cellular network and provide Public Land Mobile Network Services in December 1999.

In April 2008, the company introduced M-Pesa, a mobile money transfer service that took the country by storm.