Africa’s Telecom giant group, Vodacom, plans a bond issue to fund new growth. According to BMA sources, the telecom group needs the funds to complete the acquisition of a majority stake in Vodafone Egypt, a deal that will cost the group US$2.7 billion, which was agreed upon with UK parent Vodafone Group last year.
According to Vodacom’s Chief Financial Officer, Raisibe Morathi, the group will use part of the funds to pay for the newly auctioned spectrum in South Africa.
In its annual earnings statement, Vodacom indicated that it will regress to an outlay of at least 75 per cent of headline earnings to shareholders, down from 90 per cent.
Morathi added that the group plans to transform Vodacom from a straight telecommunications provider to a technology firm.
“We are arranging debt, and we needed the support of a more prominent firm in servicing that debt,” the Chief Financial Officer said.
In addition, “Investors will now receive 75 per cent of a faster-growing business,” he said.
African telecom providers are moving towards fintech services as more customers conduct banking and other business online.
In recent years Vodacom has managed to increase its revenue from the fast-growing M-Pesa service, the Kenyan mobile money service operated by partner Safaricom.
The group’s earnings per share increased by 3.6 per cent and sales increased by 4.5 per cent to US$6.3 billion. The stock rose to 1.6 per cent in early trade in Johannesburg.