The Government of South Africa wanted to ensure that all South Africans would have an opportunity to participate and buy shares as part of the privatisation of Telkom.
In 2000, the Government of South Africa was considering the privatisation of Telkom. During the initial planning stages, government representatives met with personnel from Sanlam and Old Mutual, two South African insurers who had demutualised and listed in 1997 and 1998 respectively.
As Solid Solutions had been actively involved with both those transactions, we were recommended to the government. In March 2001 Solid Solutions met with the Government and their advisers and within a week we were appointed to organise the logistics and retail offer.
This was the first mass privatisation in modern South Africa and so an extensive national education campaign about share ownership was undertaken. Over 8 million educational booklets were distributed around the country via Post Offices and Standard Bank. 50 Regional roadshow events were held from church halls to army bases.
Members of the public were then invited to register for the Telkom Share Offer - 1.5 million citizens registered. This was followed by a 2 week Offer period by the end of which 104,000 individuals had applied for R335 million worth of shares. This represented 7% of the offer and exceeded the initially target figure of 5%. 60% of applications were from historically disadvantaged individuals and those on lower incomes.
We were appointed to project manage the retail offer, reporting to the Government's Department of Public Enterprises and the Joint Global Coordinators led by JP Morgan and Deutsche Bank. Throughout the project Solid Solutions worked closely with representatives from the Government Department to ensure that there was an appropriate skills transfer as part of the country's Black Economic Empowerment initiative.
Once the IPO had been successfully launched, we were appointed by the Government to write a manual on 'How to implement an IPO' - this was subsequently published.
Following the successful demutualisation and flotation of Norwich Union, the management of Sanlam met with the directors of NU to explore the feasibilities of undertaking the same process in South Africa.
NU recommend Solid Solutions to Sanlam to handle the retail logistics. Within 48 hours we were in Cape Town and appointed.
Sanlam was the first mass share ownership exercise in South African and Namibian history. Although not a privatisation, many of the issues faced in terms of creating awareness and organising the logistics for millions of people were the same. Added to which the Directors were keen to complete the process in the shortest possible time.
The transaction resulted in:
over 1.5 million people owning shares for the first time;
at the time the largest voting exercise in South Africa's corporate history with over 1 million people voting;
98,000 individuals applying for R1 billion worth of shares, making it the largest retail share offer, in monetary terms, in South Africa; and
one of the world's fastest demutualisations
Nigel was seconded to Sanlam, based in their Cape Town office to head up the logistics team. He reported to the Board with Sanlam staff reporting into him.
For further information please contact us as follows
Solid Solutions Associates
5 St Johns Lane
Phone: +44 (0)20 7549 1613