African cellular operator MTN's management and staff have sold a million MTN shares held by a holding company, at R20 each.
The shares are being sold as part of a 2003 agreement with lenders that financed Newshelf's R4.3 billion purchase of 309 million MTN shares. Newshelf, held by the Alpine Trust and controlled by MTN directors, is meeting the obligations of the financing agreement.
The Alpine Trust benefits management and employees, including MTN's executive directors, as well as some of the directors of MTN's major subsidiaries. Its directors include MTN CEO Phuthuma Nhleko.
The unwinding is set to take place over a few months and, as a result, Newshelf will sell 65.5 million MTN shares to its financiers. In a statement to shareholders, MTN says "the price per share was market-related at the time the hedge transaction was entered into in 2003".
However, the holding company could buy back some shares, now trading at around R86.50, at a later date.
Newshelf's direct beneficial holding in MTN after the initial sale has moved down to 308 million MTN shares; however, it still has voting control over 243.5 million MTN shares. Once the entire series of disposals has been completed, and assuming Newshelf does not repurchase any of the disposed shares, it will hold a direct beneficial interest in 243.5 million MTN shares.
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