Vodacom Group prepared to instigate ZAR17.6 billion ($1.3 billion) worth of transactions involving existing stakeholders and employees with the goal of increasing the proportion of shares owned by black investors to 20 per cent.

In a statement, the South Africa-based telecoms group announced a scheme where existing Black Economic Empowerment (BEE) partners exchange stakes in the company’s South African division for shareholdings in the parent company. Additionally, Vodacom will create a new staff programme to increase ownership among specific employee groups.

The new initiatives replace an existing effort to improve its ratio of black investors to meet government guidelines in South Africa. Its previous programme is due to expire in October 2018 with the replacement proposal subject to shareholder and regulatory approval.

Recent data on black ownership levels for Vodacom Group were not disclosed in the announcement.

As a result of the transaction – and subsequent issuance of new shares in Vodacom Group – majority shareholder Vodafone Group’s holding will fall 4 per cent to around 60 per cent.

Vodacom Group CEO Shameel Joosub said: “Our intention was always to move our BEE investors from being shareholders in Vodacom South Africa to a shareholding at the group level thereby giving them exposure to the broader local and international markets in which Vodacom Group trades.”

Meeting a number of BEE guidelines – including targets on the ethnic make-up of top management, employees and shareholders – allow companies to apply for public sector contracts in South Africa, depending on the level of compliance reached.

Hitting specific targets had also been floated as one of the prerequisites of bidding in a long-delayed auction for a new allocation of 4G spectrum in the country, and could potentially be included in future auctions for 5G-suitable frequencies.