Vodacom-YeboYethu deal as driver for BEE transformation in SA

Vodacom Group and YeboYethu recently closed a monumental R16.4 billion BEE transaction, marking a significant milestone in the history of BEE in South Africa. This deal has not only brought in a substantial amount of money but has also impacted a large number of people, including 85,000 Black investors, including 8,500 current and past employees. Verushca Pillay, the lead legal advisor to both Vodacom and YeboYethu, shed light on the rationale behind the deal during a recent CNBC Africa interview. The original BEE transaction was initiated in 2008, making this recent transaction the culmination of a decade-long journey. Vodacom's desire to increase their overall BEE shareholding was a key driving force behind this deal. The transaction involved current BEE partners from the 2008 deal who chose to reinvest in the group. This reinvestment signifies their commitment to the company and their belief in its growth and success. What sets this deal apart is that it expands beyond South Africa to include assets held by the broader Vodacom group across international markets. In terms of numbers, the deal encompasses billions, with a significant dividend expected to benefit existing shareholders. Pillay emphasized the success of this deal compared to previous BEE transactions that faced challenges and required refinancing. The new deal's structure includes a combination of debt funding and vendor funding by Vodacom, providing significant benefits to all parties involved. YeboYethu being listed on the BEE segment allows for shareholders to trade their shares freely, eliminating the concept of a lock-in period. Additionally, a significant shareholding has been allocated to employees through a new trust vehicle, ensuring a broad-based shareholding structure. A standout figure from the deal is the special dividend of 3.26 billion rand that will be paid out to shareholders, making it one of the largest in recent history. Pillay highlighted the positive reception of the deal among Vodacom employees, who will receive shares in the YeboYethu vehicle and dividends as declared by Vodacom. The involvement of workers in the deal signifies a shift towards prioritizing and empowering internal stakeholders, recognizing their contribution to the company's success. The Vodacom-YeboYethu deal stands as a game changer in the realm of BEE transformation, setting a new precedent for inclusive and sustainable economic empowerment in South Africa.