Fin24

Vodacom DRC share auction put on hold

2012-06-04 12:53

Johannesburg - The Democratic Republic of Congo Supreme Court has suspended a planned mandatory auction of shares in the local unit of South African mobile phone provider Vodacom Group [JSE:VOD], the parent company said on Monday.

The auction was planned for June 3 but was suspended pending the outcome of “certain legal proceedings”, the group said in a statement, without giving further details.

Vodacom, a unit of Britain’s Vodafone Plc, said on May 21 it would fight a court ruling which said that it must pay $21m in fees to local consultant Namemco Energy or face the sale of all its shares in the Congolese unit.  

The company was already locked in a long-standing battle over fees with its partner in the DRC, Congolese Wireless Network.

It had been looking at options to exit the business, but that process has been halted by the suit from Namemco.

The value of the unit is also disputed. Congolese Wireless Network chairman Alieu Conteh told Reuters in 2010 that Vodacom Congo was worth more than $1.5bn, a figure Vodacom quickly described as “ludicrous”.

Vodacom’s major African operations are in South Africa, the Democratic Republic of Congo and Tanzania, where it is fighting to defend market share from larger competitors such as MTN Group [JSE:MTN] and India’s Bharti Airtel.

Vodacom shares in Johannesburg were up 0.48% at R102.15 at 10:01 GMT compared with a 0.31% fall in the JSE Top 40 - (Tradeable) [JSE:J200] index of blue-chip companies.