Vodacom Considers South Africa Financial Services Unit IPO
Vodacom May Consider Listing South Africa Unit to Boost Value
(Bloomberg) -- Vodacom Group Ltd. may consider a separate listing of its financial services business in South Africa to unlock value, seeking to address what Chief Executive Officer Shameel Joosub says is a stockmarket discount to the carrier’s sum-of-parts worth.
The overall company, which also includes operations in Tanzania and Mozambique, trades in Johannesburg and could look at whether a carve out of the financial services unit makes sense, he said in an interview on Monday.
“We are looking at how to give more disclosure so that the market gives us credit for our assets,” the CEO said. “If not, we will look at optionality on whether to list some,” he said.
The company, which last week agreed to buy a majority stake in Vodafone Group Plc’s Egypt unit, is also separating its telecom towers portfolio into a new unit. The group won’t look to sell the masts but would rather seek partners to grow the business, Joosub said.
Vodacom is also looking for partners to grow fiber networks in operations outside of its home market, the CEO said. The company last week agreed to buy a minority stake in a vehicle housing South African fiber companies Vumatel Pty and Dark Fibre Africa Pty. The majority owner is a unit of Remgro Ltd., billionaire Johann Rupert’s investment firm.
Joosub’s comments come as Africa-focused telecom firms look to wring more value out of their continent-wide operations. Vodacom’s Johannesburg-based rival MTN Group Ltd. is working on a deal to sell and lease back South African masts and has had its financial-technology business valued at 87 billion rand ($5.7 billion) ahead of a potential spinoff next year.
The stock traded down 1.4% as of 4:46 p.m. local time, and has gained 11% this year. By contrast, MTN has surged 164% in 2021 and surpassed Vodacom’s market capitalization along the way.
Vodacom is more than 60% owned by the U.K.’s Vodafone, according to data compiled by Bloomberg.
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