Tanzania: Vodacom Not Keen to List On Dar es Salaam Stock Exchange

South African media has reported that Vodacom was in talks with the Tanzanian government to extend the time it had to list its shares on the Dar es Salaam Stock Exchange (DSE).

The government last month amended the Electronic and Postal Communication Act, 2010 to require phone companies to sell as much as 25 per cent of shares on the DSE to boost local ownership.

The amendment requires the existing company to list on DSE in six month after the date of change, which comes to December.

"I think the time span that has been put in place is exceptionally short, so we are going to have to work on what we can do to extend that and to understand certain requirements," Ian Ferrao, Vodacom's Managing Director of its Tanzanian operations was quoted by a section of South African media saying.

However, when 'Daily News' Online cross-checked with Vodacom Tanzania public relations and communications said there are not in discussion with the government over DSE listing extension.

Vodacom Tanzania Head of Public Relations and Communications Rosalynn Moria said over a telephone text message that the firm was not in any talks with the government.

"No we are not," Ms Moria texted back when asked if the firm was engaged on any talks with the government regarding listing issue.

Peter Takaendesa, a portfolio manager at South African based Mergence Investment Managers, said: "There are a number of reasons for the resistance to the listing requirement and they include the potential of the parent companies' shareholdings getting diluted, as well as shallow equity markets in most African countries."

Takaendesa said Vodacom raised its stake in Vodacom Tanzania to above 82 percent in 2013 and the listing requirements call for at least a 20 percent float on the exchange. This implied that Vodacom's stake would have to be diluted.

The dilution would obviously be more for other operators that owned bigger stakes in their Tanzanian operations, he said. Sasha Naryshkine, an analyst at Vestact, said Tanzania had a young energetic population with a government that was seemingly spending in order to get the infrastructure moving.

"A local listing would encourage the regulators to be more favourable, knowing that there is a vested interest locally, and that they are not just part of a big global brand. I guess Tanzania is right for Vodacom," Naryshkine said.

There are five larger telecom operators in the country namely; Vodacom, Tigo, Airtel, Zantel, and Halotel serving some 30 million sim cardholders.

Source: Tanzania Daily News