Vodacom has signed an agreement with private investment firm Cavalry Holdings to acquire an additional indirect 17.2 per cent stake in Vodacom Tanzania for ZAR2.5 billion (US$247 million), taking its total share in the company to 82.2 per cent.
In an announcement to shareholders, Vodacom said the transaction dilutes Cavalry’s existing shareholders’ interest in Cavalry to 51 per cent from 100 per cent, while retaining an indirect 17.8 per cent interest in Vodacom Tanzania, the largest operator in the East African country with over 10 million mobile customers.
Vodacom said it was looking to increase its exposure to one of its key African investments, with Vodacom Tanzania’s service revenue having grown by 19.1 per cent for the six months ended September 2013.
“Vodacom Tanzania has been Vodacom’s most successful investment outside of South Africa to date,” the company said. “Tanzania is an attractive telecoms market with mobile penetration only at 57% as at 30 September 2013. This transaction will increase Vodacom’s effective exposure to this high growth market.”
The company said it will fund the purchase through cash resources and existing debt facilities, and should close the transaction by the end of the financial year.