In Summary
Telco says Sh47 billion net
profit expected to double to Sh96bn a year after its initial public offering
set to open today.
Vodacom is Tanzania’s market
leader controlling 31 per cent share of the mobile subscription by December
2016, according to the Tanzania Communications Regulatory Authority
Dar es Salaam. Vodacom Tanzania Public Limited Company is promising its
prospective investors that the company’s profits will more than double during
its first year of trading at the Dar es Salaam Stock Exchange (DSE).
The telecom company is selling 560 million shares
worth Sh476 billion through an initial public offering (IPO) to comply with the
Electronic and Postal Communications Act of 2010 which requires telecommunications
firms to offload 25 per cent of their stake to the public.
The share price will be Sh850. One can buy a
minimum of 100 shares.
Vodacom will hold its news conference today on the IPO.
Stockbrokers say it’s a big thing which is making them busy even before the
beginning of sale of shares.
“I’m also facilitating training to officials
of a bank from Zanzibar which also wants to participate fully as an agent in
the Isles.”
The IPO runs from March 9 to April 19, 2017
following an approval by the Capital Markets and Securities Regulatory
Authority.
Tanzania is said to have 89 telecommunications firms which are
supposed to list on the DSE but so far only four — Vodacom, Airtel, Tigo and
Maxcom — have submitted their applications even as the deadline expired at the
end of last year.
Vodacom states in the prospectus that it projects to
increase its profits after tax from Sh47.28 billion in the year ending March
31, 2017 to Sh95.87 billion, a 102.8 per cent increase, in the year ending
March 31, 2018.
The financial statements indicate that the firm’s profits were
Sh128.2 billion in 2014, Sh32.05 billion in 2015 and Sh29.1 billion in 2016.
The IPO is the biggest ever since the start of the operations of the capital
markets in Tanzania in 1998.
Vodacom is Tanzania’s market leader controlling
31 per cent share of the mobile subscription by December 2016, according to
Tanzania Communications Regulatory Authority.
It is followed by Tigo with the market share of
29 per cent, Airtel (26), Halotel (8), Smart (2) and TTCL (1).
“Tanzanians have been long ing for
telecommunications companies to go public and this is the first one. The market
is ready for it,” said Orbit Securities Ltd general manager Juventus
Simon.
“A countrywide awareness campaign is also needed
to empower Tanzanians with this kind of knowledge.”
Before the IPO, Vodacom Group of South Africa
owned 65 per cent of Vodacom Tanzania directly and a further 17.15 per cent
indirectly through its holding in Mirambo Limited.
After the listing, Vodacom Group will now own
48.75 per cent and 26.25 per cent is owned by Mirambo Limited while the
remaining 25 per cent goes to the public.
“There are existing arrangements between Vodacom
Group, Mirambo Limited and the other indirect shareholders of Mirambo which
relate, amongst other things, to the operation of Mirambo and the exercise of
the voting rights held by Mirambo in Vodacom Tanzania.
Under these
arrangements, the direct and indirect shareholders of Mirambo have agreed that
49 per cent of the shares held by Mirambo in Vodacom Tanzania shall be voted in
accordance with the instructions of Vodacom Group,” the prospectus states.
“Vodacom Group is desirous, after the listing of
Vodacom Tanzania’s ordinary shares on the DSE and subject to the provisions of
the Capital Markets and Securities Act, of increasing its direct shareholding
in Vodacom Tanzania.
Vodacom Group has held exploratory discussions with
Mirambo in this regard. As at the date of this Prospectus, no agreement has
been reached,” it adds.
The Citizen
The Citizen
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