MTN Group says it intends to implement a new R9.9 billion Broad-Based Black Economic Empowerment (BEE) transaction called MTN Zakhele Futhi, when its existing vehicle, MTN Zakhele, unwinds in November.
MTN Zakhel, which was established in 2010 and listed on the JSE’s empowerment board last November, has 124,00 black investors.
Its value has increased nearly fourfold from R20 a share at inception in 2010, to about R77 a share when the share price closed on 17 August. That equates to a total return of about 400 percent and a compounded annual growth of about 26%.
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 in MTN Zakhele Futhi – with a minimum investment amount of R2,000;
- MTN Zakhele shareholders will be given the opportunity to re-invest a portion of their MTN Zakhele shares in MTN Zakhele Futhi.
MTN Zakhele Futhi will hold approximately 4% equity in MTN Group.
The MTN 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 (VWAP) per MTN share on 17 August 2016 of R128,50.
The MTN Zakhele Futhi Offer is expected to be launched on 12 September 2016, and will close on 21 October 2016. The mandatory unwinding of MTN Zakhele will take place on 24 November 2016.
In addition to the new MTN Zakhele Futhi scheme, the MTN Board of Directors has proposed the introduction of a new employee share ownership plan (ESOP) for MTN staff, excluding directors and management.
The new ESOP scheme will not require equity from eligible participants.
Accordingly, MTN will issue approximately 0.1% of its issued share capital to be held in a trust for the benefit of these employees.
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