S.African court clears Vodacom for listing

By Gugulakhe Lourie

PRETORIA (Reuters) - A South African court threw out on Sunday a bid by powerful trade union federation COSATU to block Monday's planned listing of mobile phone company Vodacom, one of the country's largest stock exchange debuts.

"I am not going to issue an interdict to COSATU," Judge John Murphey told the High Court in Pretoria. "I dismiss the application with costs."

COSATU said it was "disappointed and angry" at the decision, which paves the way for British mobile phone giant Vodafone <VOD.L> to increase to 65 percent its stake in Vodacom, the largest mobile operator in Africa's biggest economy.

The trade union group, which regards new President Jacob Zuma as a political ally, urged South African consumers to boycott the firm.

"The fight goes on. We shall use all possible legal means to prevent the sale of this South African company and to protect the jobs of the workers," COSATU spokesman Patrick Craven told reporters outside the court.

Vodacom said it welcomed the decision and looked forward to the listing as planned.

Halting the deal on its eve would have been a huge blow to South Africa's credentials as an investor-friendly emerging market and intensify fears of resurgent union clout under Zuma.

It would also have hit the rand since Vodafone <VOD.L> has already brought 20.5 billion rand (1.6 billion pounds) into the country to buy a 15 percent stake in Vodacom, Vodacom's lawyers told the hearing.

The listing of Vodacom, which some analysts have valued at more than 70 billion rand, is the final part of a plan by fixed-line operator Telkom <TKGJ.J> to get rid of its 50 percent stake in the country's biggest mobile operator.

Under the plan, Vodafone agreed to buy the 15 percent stake from Telkom, giving it a controlling 65 percent holding. Telkom will then distribute its remaining 35 percent to shareholders.

(Writing by Ed Cropley; Editing by Marius Bosch)

Article Published: 17/05/2009