The National Empowerment Fund (NEF), a state-owned entity, has introduced a share scheme where it will sell its 1.5% shareholding in MTN, at a 20% discount, to black individuals and investment groups.
The scheme aims to encourage saving and investment among black South Africans, says NEF CEO Philisiwe Buthelezi.
MTN shares traded at R93 this morning, putting the proposed transaction value at about R1.3 billion. The shares will be sold at South African Post Office branches from 23 July to 16 August.
The shares will be sold at a minimum subscription of R2 000, with a maximum of R50 000 for individuals and R100 000 for stokvels and other savings groups.
The NEF initially purchased the shares for R171 million in 2002. Government's intention was for these shares to eventually be transferred to black people, says Buthelezi.
"The share scheme allows black individuals, as well as black savings and investment groups, such as stokvels, burial services, trusts, cooperatives, church groups and others, the ability to invest in MTN shares at an attractive 20% discount," the state-owned entity explains in a media statement.
Equitable allocations
NEF chairman Ronnie Ntuli says predetermined allocations will ensure all regions across the country benefit equitably.
"The shares will be allocated to ensure a provincial bias in accordance with the population size of the target market per province," he says.
Half of the shares will be allocated to individuals, half of which must be women, with the other half allocated towards savings and investment groups.
The offer has a 12-month lock-in period and investors who hold the shares for 24 months will receive bonus shares of one share for every 10 shares held, the NEF says. This will encourage long-term investment.
Potential investors must be black individuals (Africans, Coloureds and Indians), savings and/or investment groups, be 18 years or older, in possession of a valid South African ID, have a bank account and be able to produce proof of residence, the NEF says.
The NEF is going on a roadshow from 30 June to educate the target audience about the investment opportunity.
MTN Group spokesperson Nozipho January-Bardill says the company welcomes the enhanced BEE equity ownership.
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