Vodafone (LON:VOD) has moved to trim its holding in South Africa’s Vodacom, the FTSE 100 company has said. The sale is part of the London-listed telco’s move to consolidate its holdings in Africa.
Vodafone’s share price has been subdued in London in today’s session, having slipped 0.74 percent to 215.95p, slightly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.43 percent lower at 7,341.40 points. The shares have lost more than four percent of their value over the past year, but are up by about eight percent in the year-to-date.
Vodafone announced in a statement today that it had sold an aggregate of 90 million ordinary shares in Vodacom by way of placing of ordinary shares to institutional investors in an accelerated bookbuilding process. The shares were sold at a price of ZAR 165 per ordinary share, raising gross proceeds of ZAR 14,850 million, or about £880.26 million. Following the completion of the placing, the FTSE 100 group will hold about 64.5 percent in Vodacom.
Reuters noted in its coverage of the news that the sale follows Vodafone’s move to consolidate its African holdings by selling most of its holding in Kenya’s Safaricom to Vodacom in exchange for a larger stake in the South African company. The deal, however, pushed the proportion of Vodacom’s shares which are traded on the Johannesburg Security Exchange below the minimum threshold of 20 percent.
“As part of the Safaricom transaction, Vodafone therefore committed to Vodacom that it would sell down a sufficient number of shares to ensure that Vodacom will meet the 20 percent minimum free float requirement on the JSE,” Vodafone explained in a separate statement yesterday.
The sale comes after last month, Vodafone urged India’s government to resist pressure from rival Reliance Jio for a cut in mobile interconnection charges. The UK group is currently merging its unit in the country with local provider Idea Cellular, having taken a €3.6-billion charge on the division in November.