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MTN’s new BBBEE investment
Posted by Daniel Makhura on 27 September 2017 7:30 AM SAST
More information about the above
Article dated 23 August 2016
Source: http://www.thenewage.co.za/mtns-new-bbbee-investment/
Africa’s biggest mobile phone company, MTN Group, yesterday announced its new R9.9bn broad-based black economic empowerment (BBEE) transaction, MTN Zakhele Futhi, will replace its existing special purpose empowerment vehicle, MTN Zakhele, when the latter contractually unwinds on November 24.
The group said it was committed to the fundamentals of transformation and empowerment in South Africa, to enable historically disadvantaged individuals and groups to participate in the economic mainstream and more specifically to give them equity ownership in the company.
“MTN Zakhele has created exceptional value for its 12400 black investors, notwithstanding an extremely difficult nine months, increasing nearly fourfold from R20/share at inception in 2010, to about R77/share when the share price closed last Wednesday. “That equates to a total return of about 400% and a compounded annual growth of about 26%,” the group said in a statement.
The mandatory unwinding of MTN Zakhele on November 24, combined with the creation of the new MTN Zakhele Futhi scheme, will see the company not only maintain its BBBEE targets as set out in the information and communication technology sector code (the ICT Charter) but also adhere to the BBBEE Act, allowing it to further embed empowerment and transformation in the DNA of its business.
The proposed MTN Zakhele Futhi scheme will take the form of a public offering where qualifying black participants will be invited to subscribe for and beneficially own ordinary shares (with a minimum investment amount of R2000); and MTN Zakhele shareholders will be given the opportunity to reinvest a portion of their shares in MTN Zakhele Futhi.
MTN Zakhele Futhi is a special purpose vehicle, which will hold approximately 4% equity in the group. The shares, to be issued to MTN Zakhele Futhi, will be issued at R102.80, a 20% discount to the 10 day volume weighted average price per share on 17 August 2016 of R128.50.
MTN Zakhele Futhi is designed to offer the black public an opportunity for long-term and sustainable benefits during the scheme’s proposed eightyear period, giving them exposure to the company’s geographically diversified operations, earnings and growth markets.
Group executive chairperson Phuthuma Nhleko says: “This new transaction, together with the continuing contribution of the MTN Zakhele transaction, will translate to an effective indirect ‘see-through’ black ownership in excess of 30% of MTN’s local operations.”
The MTN Zakhele Futhi offer is expected to be launched on September 12 and will close on October 21. In addition to the new MTN Zakhele Futhi scheme, the board of directors has proposed the introduction of a new employee share ownership plan for its staff, excluding directors and management.
The new scheme will not require equity from eligible participants. Accordingly, the group will issue about 0.1% of its issued share capital to be held in a trust for the benefit of these employees.
