The government has advanced a proposal that seeks to ensure investors from East Africa and beyond as well as Tanzanians in diaspora are able to take part in the impending initial public offerings (IPOs).
Winding up the debate on the Sh31,7 trillion budget for the Financial Year 2017/18 in Parliament yesterday, the Finance and Planning Minister, Dr Philip Mpango informed the House that the government would amend the Electronic and Postal Communications Act (Epoca) 2010 with a view to allowing investors across the East African Community member states, Tanzanians in diaspora and foreign investors to take part in pending IPOs for telecommunications firms, including those for Airtel Tanzania and Tigo.
Going by Epoca 2010, telecommunication firms are required to offload 25 percent of their shares for the public through the Dar es Salaam Stock Exchange (DSE).
In this regard, Vodacom Tanzania became the first telecommunications firm to issue an IPO early this year in which it sought to raise Sh476 billion by selling 560 million shares at Sh850 each.
With capital controls, however, the IPO was only open to local investors and so far, the company has been unable to reveal the IPO results, with pundits speculating that it might have underperformed due to a tight liquidity in the economy.
The Vodacom Tanzania PLC’s IPO ended on May 11 and subsequent listing was scheduled for June 12 but it has remained silent — including on revealing the IPO outcomes — since then, causing anxiety among some of its new investors.
The company’s MD, Mr Ian Ferrao, told The Citizen on Monday that Vodacom was only awaiting regulatory approvals from capital markets authorities to go ahead with listing after a total of 40,000 new investors bought shares.
But speaking after eight Cabinet ministers and his deputy, Dr Ashatu Kijaji responded to some other issues as raised by MPs during the six days of the budget debate, Dr Mpango, said the government is amending the Epoca 2010 — probably through the Finance Bills 2017 — so as to allow more investors to take part in telecommunication firms’ IPOs.
“If a company that will have issued an IPO and fails to raise the required amount, the relevant ministry will come up with a modality that will guide it (the company) on how to raise the entire money as required by the law,” he said.
