Vodacom's Tanzania unit to raise $213 million in share offer

Dar es Salaam: Vodacom Group Ltd.’s Tanzanian unit plans to raise 476 billion shillings ($213 million) in a share sale, the first of a series of initial public offerings by telecommunications companies on the domestic stock exchange this year.
The company plans to sell 560 million shares at 850 shillings each after it received approval on Tuesday from the Capital Markets and Securities Authority, Godfrey Gabriel, head of corporate and market research at lead manager Orbit Securities Ltd., said by phone from the commercial capital, Dar es Salaam. Charles Shirima, a spokesman for the regulator, confirmed approval had been granted.
Tanzania in June enacted a law requiring phone companies to sell at least a 25 per cent stake of their units in the country on the Dar es Salaam Stock Exchange to boost local ownership. The industry has more than quadrupled its subscriber base over the past decade to more than 40 million users, according to the industry regulator.
Vodacom is the country’s largest operator with 31 per cent market share, followed by Millicom International Cellular SA’s Tigo, Bharti Airtel Ltd.’s domestic subsidiary and Halotel, a unit of Vietnam’s Viettel Group. Companies registered in Tanzania after July 2016 are exempt from the listing requirement for at least two years.
The shares being offered equate to 25 per cent of Vodacom Tanzania, the company said in an e-mailed response to questions. That values the Vodacom Tanzania at 1.9 trillion shillings ($852 million). Safaricom Ltd., East Africa’s biggest mobile operator based in neighboring Kenya that’s also part-owned by Vodacom parent Vodafone Plc, has a market capitalisation of 713 billion Kenyan shillings ($6.93 billion).
The offering by Vodacom will boost the Dar es Salaam Stock Exchange’s market capitalisation by 2.4 per cent, according to data on the bourse’s website.
Details of the IPO, including when and how eligible potential investors will be able to subscribe for Vodacom Tanzania shares, will be announced in due course, the company said.