As MTN’s Zakhele lifecycle comes to an end, black investors will have another opportunity to own a slice of the telecommunications giant through Zakhele Futhi which will launch its public offering between 12 September and 21 October.
The new scheme is set to run for eight years and MTN is hoping to replicate successes achieved through its first black investor scheme.
“MTN Zakhele has created exceptional value for its 124 000 black investors, notwithstanding an extremely difficult nine months, increasing nearly fourfold from R20 per share at inception in 2010, to about R77 per share when the share closed last Wednesday, 17 August 2016. That equates to a total return of about 400% and a compounded annual growth of about 26%,” MTN said in a statement on Monday.
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Qualifying black investors will be invited to participate in the scheme and need to invest at least R2 000, at a 20% discounted price of R102,80 – the 10-day volume weighted average price per MTN share on 17 August of R128,50.
“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 South African operations,” group executive chairman Phuthuma Nhleko said.
Current MTN Zakhele shareholders will have the option to re-invest in MTN Zakhele Futhi.
“MTN Zakhele ordinary shareholders have the option of realising value through selecting MTN Group shares; a cash consideration equal to the market price of the MTN Group shares which MTN Zakhele shareholders could otherwise receive; or, subject to the new empowerment transaction going ahead, MTN Zakhele Futhi shares in terms of the re-investment offer,” MTN Zakhele Chairperson Sindi Mabaso-Koyana said.
“Shareholders may choose one or a combination of these options. In order to be eligible to elect to receive MTN Group shares, shareholders must hold and elect MTN Group shares in respect of at least 200 MTN Zakhele shares, and to be eligible to elect MTN Zakhele Futhi shares, shareholders must own and elect MTN Zakhele Futhi shares in respect of at least 50 MTN Zakhele shares.”
The R9,9 billion scheme will hold 1 4% equity stake in MTN and the group has warned potential investors against fronting and misrepresenting their BEE status, saying those who are caught “may be forced to sell their MTN Zakhele Futhi ordinary shares to MTN or persons identified by it, at a potentially discounted price”.
MTN will also be introducing a new employee share option plan for staff members.