Landmark Transaction in the Tanzanian Capital Markets
October 20, 2017
We are pleased to announce that Absa Corporate and Investment Banking acting through National Bank of Commerce (“NBC”) have advised Vodacom Group on the successful TZS 476 billion ($213 million) IPO of Vodacom Tanzania Public Limited Company (“Vodacom Tanzania”) on the Dar es Salaam Stock Exchange (“DSE”). Vodacom Tanzania is the leading telecommunications provider in Tanzania, offering voice, data and mobile money services to an estimated 12.4 million subscribers. On 1 July 2016, the Tanzanian parliament legislated that telecommunications licensees in the country are required to list a minimum of 25% of their shares on the DSE. Vodacom Tanzania is the first mobile network operator to list on the DSE fulfilling its license obligations. African equity markets are at a nascent stage of development and in recent years have seen limited capital rising. Against this backdrop, the Vodacom Tanzania IPO stands out as a landmark and transformational transaction in the African capital markets, raising capital from domestic and international investors. At USD 213 million, the Vodacom Tanzania IPO is the fourth largest in Sub-Saharan Africa, outside South Africa, since 2008 and stands out for a number of reasons:
The IPO size was nearly four times larger than any previous IPOs done on the DSE and approximately equal to the sum of IPOs combined in the previous 10 years.
A landmark transaction on the DSE, raising the market capitalization of the exchange by c.10%
In excess of 40,000 local investors participated in the offer, many who were first time participants in the capital markets
Raised the profile of the DSE by offering an attractive, investable company for domestic and international investors
Vodacom Tanzania has successfully fulfilled its regulatory obligations to list
Vodacom Tanzania was the first telecoms company to market, attracting maximum participation from a developing domestic investor base. It has set the standard for all future telecom IPOs
“This transaction is a milestone in the evolution of the Tanzanian capital markets and consistent with Absa’s vision of Shared Growth in promoting development across the continent,” says Hasnen Varawalla, Co-Head of Banking at Barclays Africa. “The Vodacom Tanzania IPO was the first IPO of this scale in Tanzania”, says Till Streichert, Chief Financial Officer for the Vodacom Group. “Its success is testament to the nature of the partnership between Vodacom Tanzania, Vodacom Group, the Absa and Barclays team, NBC and other advisors who worked together to deliver a transaction that met domestic regulatory requirements while incorporating international best practice.” This success was possible as a result of:
A committed, supportive and experienced management team and shareholders that worked seamlessly with all advisors
Extensive investor education campaign driven by management, the Tanzanian broker universe and the receiving bank, NBC
Comprehensive roadshow across all major centers in Tanzania
Seamless execution by NBC acting as the Receiving Bank, which put a core banking system in place, procured specialised software and dedicated a trained 282-strong IPO team to manage and execute collections for the transaction - processing over 40,000 applications with zero errors
Trading of the Vodacom Tanzania stock on the DSE commenced on 15 August 2017. “Through our own Shared Growth vision, paired with our expertise in capital markets, we have delivered a transaction that has transformed the Tanzanian capital markets and provides a platform for similar African IPOs. We congratulate Vodacom Tanzania on its debut as a listed company and wish it well for the future”, concludes Varawalla. Barclays Africa Group Limited (‘Barclays Africa Group’ or ‘the Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups. As of June 2017, Barclays PLC is a minority shareholder in Barclays Africa Group. Barclays Africa Group offers an integrated set of products and services across personal and business banking, corporate and investment banking, wealth and investment management and insurance. We are strongly positioned as a fully local bank with regional and international expertise. We are committed to Shared Growth, which for us means having a positive impact on society and delivering shareholder value. Barclays Africa Group operates in 12 countries, with approximately 40 000 employees, serving close to 12 million customers. The Group’s registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.
