13 Sep - 3 min read

Investment in Ethiopia

Investment in Ethiopia

Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
(ISIN: ZAE000132577 Share Code: VOD)
(ISIN US92858D2009 ADR Code VDMCY)
 ("Vodacom" or the "company")

Investment in Ethiopia

1. Introduction

Shareholders are referred to the announcement by the Government of Ethiopia wherein an
international consortium named the Global Partnership for Ethiopia (“the Consortium”) was
awarded a mobile telecommunication license in Ethiopia.

A new operating company in Ethiopia, Safaricom Telecommunications Ethiopia PLC (“Ethiopia
Opco”) through a holding company in the Netherlands (“Holding Company”) has been
established to commence with the provision of mobile telecommunications services. The
Consortium includes Safaricom PLC; Vodacom; Vodafone Group Plc; Sumitomo Corporation,
one of the largest international trading and business investment companies in Japan; and
CDC Group, a United Kingdom based development finance institution and impact investor
(“Consortium Members”).

Vodacom, through its wholly-owned subsidiary Vodacom International Holdings (Proprietary)
Limited has entered into definitive unconditional agreements together with the other
Consortium Members on 10 September 2021 to fund Ethiopia Opco. Vodacom’s commitment
to fund Ethiopia Opco is limited to its pro rata beneficial shareholding of 6.2% which is not
expected to be material. Safaricom, as the lead member of the Consortium, intends to provide
additional disclosure on the funding of the Ethiopia Opco in the coming months. Vodacom will
also provide strategic operational support for the Ethiopia Opco.

2. Shareholding percentages in Ethiopia Opco
The beneficial shareholding percentages in the Ethiopia Opco as at the current date is
outlined in the table below:

 Consortium Member                                       Beneficial shareholding
 Safaricom                                                       55.7%
 Sumitomo Corporation                                            27.2%
 CDC Group                                                       10.9%
 Vodacom                                                          6.2%
 Vodafone                                                      (nominal)

3. Strategic rationale
The license unlocks a unique opportunity for the Consortium to build out world-class services
in Africa’s second largest country by population, providing a compelling long-term growth
vector for Vodacom and Safaricom. Furthermore, the investment in Ethiopia enhances
Vodacom and Safaricom’s geographic diversification.

Vodacom, excluding its indirect interest via its shareholding in Safaricom, has an effective
interest of 6.2% in the Consortium. In addition, Vodacom has indirect exposure through
Safaricom’s 55.7% effective interest in the Consortium. Vodacom intends to account for both
its 6.2% stake and indirect exposure through Safaricom on an equity accounted basis. The
Ethiopia Opco has not traded to date and so does not have any material assets, revenue or
net profit.

4. Vodacom obligations under the transaction agreements

As part of the transaction agreements, Vodacom has granted a put option on the shares held
by the CDC Group in the Holding Company to facilitate CDC Group’s potential exit in the
investment. CDC Group can only put the shares at fair market value (the total exposure of the
put option is capped at US$1,740 million, representing 10% of Vodacom’s current market
capitalization) from year 8 to year 10 from the year of commencement of commercial
operations of the Ethiopia Opco.

The transaction agreements, more fully described above, constitute a category 2 transaction
in terms of paragraph 9.5(c) and 9.15 of the JSE Listings Requirements.

13 September 2021

Sponsor: UBS South Africa (Pty) Limited

Date: 13-09-2021 12:24:00
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