MTN South Africa has announced that it has raised approximately ZAR2.8 billion (USD404.6 million) through a scheme designed to bring the black population into the mainstream economy. The shares offer, branded MTN Zakhele, significantly exceeded expectations, with 1.7 times more applicants than expected applying to participate in the scheme. MTN reports that 124,000 applicants from across South Africa applied to the offer; the majority (95%) of the applications were received during the final few days of the offer. As stated in the MTN Zakhele prospectus, because the full application for shares cannot be met, unlucky applicants will receive full refunds by electronic transfer.
In July 2010 MTN South Africa announced that it would make 4% of its shares available to black South Africans, in the largest empowerment transaction in the telecoms sector to date. Potential investors have to contribute a minimum of ZAR2000, for 100 shares. The process is open for a six-year period, with investors locked in for the first three years; at the end of the three years they will be allowed to sell, but only to other Black Economic Empowerment (BEE) investors. Phuthuma Nhleko, MTN Group President and CEO, commented: ‘The goal of MTN was to create a truly broad-based empowerment transaction that would allow ordinary qualifying South Africans to become shareholders in MTN, through MTN Zakhele. The success of the MTN Zakhele Offer has been overwhelming and represents the first step by qualifying South Africans towards building their future with MTN Zakhele Shares’.