Off-load shares or face music, mobiles ordered
Sixty Three telecommunication operators may face legal action if they do not off-load their shares to the public as stipulated by law, the Deputy Minister for Finance, Dr Ashatu Kijaji, has warned.
Speaking at the launch of the Vodacom Tanzania PLC initial public offer (IPO) in Dar es Salaam yesterday, Dr Kijaji said the operators should follow the lead set by Vodacom to shed off at least 25 per cent of their shares through an initial public offering as required by the government without coercion.
“I am calling on other operators to finalize preparations for IPO without coercion … others should also implement the government directive without coercion,” she said, at an event that marked the beginning of a series of IPOs from mobile phone companies, billed to help Tanzanians take a stake in the lucrative industry.
The firm plans to raise 476bn/- ($213 million) in an offering of 560 million shares at 850/- each, according to a prospectus issued yesterday.
Vodacom becomes the first telecoms company in Tanzania to implement the Electronic Postal and Communications Act, as amended by the Finance Act 2016, which requires all telecommunications licensees to list at least 25 per cent of their shares on Dar es Salaam Stock Exchange.
Dr Kijaji said the government would take stern measures against any telecom companies that fail to offload their shares, arguing that off-loading such shares through IPO and subsequent listing on the Dar es Salaam Stock Exchange would boost local ownership of the telecom companies, promote transparency in their operations and enable the government get its fair share in form of taxes.
“This will also enhance efficiency and transparency … it will help the government collect taxes without cheating,” she said, adding that firms going public would also promote growth through capital injection as seen in some of the DSE listed firms that have achieved growth after listing at the local bourse.
Six of the largest taxpayers in Tanzania are DSE-listed firms, most having recorded remarkable growth partly because of being listed, she said, citing as leading examples: Tanzania Breweries Limited, Tanzania Cigarette Company (TCC), NMB Bank, Swissport, Tanga Cement PLC and the Tanzania Portland Cement Company Limited (TPCC).
She called on pension funds and public companies, as well as Tanzanians in general, to buy shares of the telecom firm, saying the move would help the people participate in the economy instead of remaining as bystanders.
“This is a rare opportunity for Tanzanians to participate in the economy in their nation,” she said.
The Deputy Minister also called on brokers and agents selling Vodacom shares to go rural to enable more Tanzanians to buy shares of the mobile telephone company – expressing pity that most of the agents were based in urban areas – whereas close to 70 per cent of the estimated 49 million Tanzanian lives in rural areas.
Vodacom Tanzania Managing Director, Ian Ferrao said his team was “excited” to open our doors to the public and invite interested investors to participate in their journey which started 17 years ago.
“This is a historic event for the ‘telecoms’ sector in Tanzania, and Vodacom is now the first telecoms company to invite interested parties to apply for its shares through an initial public offering on the DSE and share our success story with Tanzanians,” he averred.
“Since the law came into force, we have worked diligently with the CMSA, DSE and other stakeholders in the government to reach this momentous milestone.
I would like to thank all key stakeholders for their commitment in the process. From today, our customers along with all Tanzanians and institutional investors are empowered to become shareholders of our Company,” he added.