MTN now plans to implement its multibillion-rand empowerment deal in the first half of 2010, after initially expecting it to go ahead earlier this year.
The company, Africa's largest cellular operator, says the deal has been delayed because of volatile market conditions. The new empowerment scheme will replace the Newshelf structure, which was wound up in May.
Group executive for corporate affairs Nozipho January-Bardill says the empowerment deal is now expected to take place in the first half of next year.
MTN is anticipated to sell between 5% and 6% of its shares to black investors, including black members of the public, staff and previous Newshelf investors. Newshelf was created independently of MTN, in 2002, by Alpine Trust when Transnet sold shares to the company at an average price of R13.90.
At MTN's current share price of R114.61, the stake would be worth around R10.5 billion, although shares are likely to be sold at a discount to the ruling price. The company will apply “a significant portion of this effective discount to future participants in a BEE transaction as an incentive to invest in that transaction,” it said in its interim results released in August.
Wrapped up
Newshelf held 13% of MTN, and its shareholders included black members of the public and top MTN managers. The stake was valued at R22.4 billion, but MTN bought its shares back from Newshelf at an 8% discount.
In a circular sent out to shareholders in April, which detailed the unwinding of Newshelf, the cellular giant said “broad-based BEE participation in MTN has contributed to MTN's success to date and is equally important to its future success”.
MTN originally planned to implement the Newshelf acquisition and the BEE transaction during the first half of 2009.
“But, in light of the extreme volatility and uncertainty of current financial markets, the board determined that it is not in the best interests of the company, MTN shareholders and the potential BEE investors to implement the BEE transaction during the first half of 2009 as originally planned,” the circular states.
The company reiterates it is “fully committed to implementing the BEE transaction”.
Share