Vodacom opens on stock exchange

JOHANNESBURG: South Africa's largest mobile operator Vodacom made its debut Monday on the Johannesburg stock market in one of the country's biggest listings after a last-ditch court battle failed to block the move.

The listing opened with shares at 59.50 rand (6.0 dollars, 5.0 euros) and climbed to 63.10 rand an hour later. Vodacom is reportedly expected to be the seventh-biggest company on the Johannesburg Securities Exchange.

"The listing provides investors with another highly respected company to add to their portfolios," said Russell Loubser, chief executive of the JSE.

The listing is part of a deal that gave Britain's Vodafone a majority 65 percent stake in the company as the national fixed-line operator Telkom shed its shares.

"The decision of a substantial company like Vodacom Group to list on the JSE after the unbundling from Telkom Ltd adds credence to the exchange's focus on issuers and investors," Loubser said.

In November 2008, Vodafone announced that it had taken control of Vodacom from Telkom after increasing its stake to 65 percent from 50 in a cash deal costing 1.4 billion pounds (2.1 billion dollars).

The JSE said over 1.4 billion shares are on issue. Fifty percent of these shares will be traded in free float while the other half will be held by fund managers.

The value of the telecom giant is estimated around 80 billion rand (9.2 billion dollars).

The listing was preceded by Telkom's sale of a 15 percent stake to Vodafone for 22.5 billion rand.

Although Vodacom's listing has been on the cards since last year, South Africa's main union federation Cosatu had launched a last-ditch court complaint at the weekend objecting to a foreign firm taking a majority stake in one of the country's biggest companies.

The complaint was sparked by a shock decision Friday from the Independent Communications Authority of South Africa (Icasa) to rescind an earlier decision to approve the deal.

The rand weakened by three percent immediately after the announcement Friday.

Icasa, Cosatu and the South African Community Party filed the urgent application to block the bid, but the court ruled that national interests could be harmed by a delay.

The sale had already been approved in March by Telkom shareholders, who include the government, as well as anti-trust regulators.

"The court bid threatened to have a negative impact on the country's investment image," said Azar Jammine a chief economist at brokerage Econometrix.

"Listing gives the company an increased chance to grow, but I think they have reached a point of saturation domestically. However, they still have a chance grow their footprint on the continent," said Jammine.

However Cosatu's spokesman Patrick Craven said the labour federation "would continue to oppose the listing by all legal means including launching a boycott of the telecommunications giant."