MTN Group to sell 4% of shares to black investors

24 Aug 2016

South Africa-based regional operator MTN Group has announced a plan to sell off 4% of its shares, valued at ZAR9.9 billion (USD730.6 million), to black investors as part of its philosophy and culture of transformation and empowerment of individuals and historically disadvantaged groups. The sale, due to be launched next month, will be offered through a new tender vehicle called ‘MTN Zakhele Futhi’ and is open to local black investors with the minimum investment threshold set at ZAR2,000. Under MTN Zakhele Futhi, shares in the Group will be sold at a price of ZAR102.80 each, representing a discount of 20% from the closing share price on 17 August 2016. The offer is expected to close on 21 October 2016.

Further, it is understood that the board of directors of MTN also intend to set up a new shareholding scheme for the firm’s employees (ESOP); approximately 0.1% of the share capital of MTN Group will be open to employees this way. MTN Group hopes that the latest initiatives will see more than 40% of the company in the hands of Black Economic Empowerment (BEE) – black investors already hold 38.75% of the telco’s shares – easily confirming its eligibility for a new 4G frequency licence from the Independent Authority of South Africa (ICASA); participants need to meet a stipulation of having a minimum 30% black ownership to take part in the tender.

South Africa, MTN Group