The final implementation of the 2016 edition of MTN’s new black economic empowerment scheme, MTN Zakhele Futhi, has started, with the expectation that it will close this week.
MTN Zakhele Futhi opened to qualifying black investors and groups in September, with the public offer raising some R1.09-billion from more than 81 000 applicants from across South Africa and R817-million being reinvested from 11 203 qualifying MTN Zakhele shareholders with 13.5-million shares.
With all outstanding conditions met, 123.4-million ordinary shares in MTN Zakhele Futhi will be allotted and issued to successful applicants on Wednesday.
On Thursday, the scheme will acquire 4% equity, or around 76.8-million shares, in MTN Group.
As the applications from the black public and qualifying MTN Zakhele shareholders were less than the target equity raise, MTN will subscribe for 27.8-million Zakhele Futhi shares at R20 apiece, representing an aggregate consideration of R557-million.
“MTN intends to warehouse these shares for a period of time and to then on-sell them to select qualifying parties. MTN has already received expressions of interest in this regard,” the JSE-listed group said in a statement on Tuesday.
MTN will, by December 23, update all applicants on the status of their applications, the extent to which their applications were accepted and the number of MTN Zakhele Futhi ordinary shares that were allocated to them.
MTN Zakhele Futhi succeeds the six-year-old MTN Zakhele, which will unwind this week upon the closure of the new transaction, and will run for a period of eight years.
After a period of three years, the fund will be listed on the JSE.
The preceding scheme had benefited over 120 000 shareholders – 98% of whom were individual investors and 85% of whom held 500 shares or less.