Almost 94% of all applicants for MTN's black economic empowerment offer have received the full amount of Zakhele shares for which they applied, as the operator prioritised its smaller investors first.
The JSE-listed mobile operator announced the offering earlier this year, in which 4% of its ordinary shares would be sold as part of a public offering. This would translate into an effective 29% ownership of the South African operations, said MTN.
The deal offered a total of 80 900 000 shares worth approximately R1.6 billion. MTN Zakhele shares were offered to members of the black public at R20 per share.
However, the offer was more than 1.7 times subscribed, as more than 124 000 applicants across the country took advantage of the offer, raising approximately R2.8 billion.
As the offer was oversubscribed, MTN adopted a “bottom-up” approach to allocate MTN Zakhele Shares to achieve truly broad-based empowerment, starting with applications for the minimum number of MTN Zakhele shares.
Fair sharing
Therefore, all valid applications for subscription amounts between R2 000 and R25 000 were accepted in full.
MTN explains that valid applications, for subscription amounts in excess of R25 000, were allocated R25 000 worth of MTN Zakhele shares, as well as a percentage of the balance of the MTN Zakhele shares applied for.
In addition, black people, who were RICA-compliant customers of MTN and who did not get their full allocation, received a preferential allocation of up to an additional 200 MTN Zakhele shares.
As a result, approximately 94% of all applicants received all of the MTN Zakhele shares that they applied for.
Corporate affairs executive Nozipho January-Bardill says MTN considers the deal to have been a great success, specifically as bottom-end applicants received the highest allocation of shares.
MTN will refund all unsuccessful or non-compliant applicants by 3 December, via electronic funds transfer into a specified transactional bank account.
Interest will be paid on the refunded amounts from the closing date of the MTN Zakhele offer, 14 October 2010 up to, but excluding, the date of payment of the refund, and will be paid together with the refunded amounts, explains the company.
January-Bardill was unable to quantify what the interest amount is likely to be.
Hefty staff investments
MTN staff also cashed in on the deal, including a significant investment of R187 million by MTN group chairman Cyril Ramaphosa.
January-Bardill explains that Ramaphosa did not receive the full allocation of shares for which he applied. The group chairman acquired the shares through his investment company Shanduka Group.
Outgoing MTN CEO Phuthuma Nhleko also acquired over R40 million worth of Zakhele shares. The investment is a drop in the ocean, after Nhleko last week sold a portion of his MTN shares worth over R400 million.
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