MTN is creating a special investment scheme, ahead of a spectrum auction next year which requires 30 per cent black ownership to place a bid.
The ZAR9.9 billion ($730 million) scheme called MTN Zakhele Futhi will replace the existing MTN Zakhele, which unwinds on 24 November.
The new scheme will take the form of a public offering whereby qualifying black participants will be invited to buy ordinary shares in MTN Zakhele Futhi (with a minimum investment of ZAR2,000). MTN Zakhele shareholders will be given an opportunity to reinvest a portion of their shares in the new vehicle.
MTN Zakhele Futhi will hold approximately 4 per cent of MTN Group’s equity.
The company said the new transaction, together with the continuing contribution of MTN Zakhele, translates into what it describes as an “effective indirect, ‘see-though’ black ownership in excess of 30 per cent of MTN’s South African operations”.
The 30 per cent ownership figure is necessary to participate in a spectrum auction planned for next year by South African telecoms regulator, Icasa.
In addition to the new investment vehicle, MTN also announced a new employee share ownership scheme, for which it will set aside about 0.1 per cent of its issued share capital to be held in a trust for employees. Existing directors and management are not eligible.
MTN Zakhele Futhi is expected to be launched on 12 September, and will close on 21 October. Copies of the prospectus will be available at branches of local bank Nedbank and MTN stores around the country.
Ownership is also on the mind of rival Vodacom where black shareholders hold 19 per cent of its equity. A planned sale by the country’s Public Investment Corporation (PIC) of a stake of about 15 per cent to black investors fell through earlier this month.