Mobile operator MTN yesterday kicked off its campaign to offer the public an opportunity to participate in the MTN Zakhele BEE share offer.
Last month, the JSE-listed group announced that 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 MTN Zakhele campaign was unveiled yesterday at the MTN Service Centre, in Protea Gardens Mall, in Soweto, Johannesburg. The empowerment initiative is envisaged to run for a period of six years, the first three of which will be a lock-in period, after which participants will be free to trade with other black investors.
The public shares will be offered at R20 per share; however, investors will be required to purchase a minimum of 100 MTN Zakhele shares and up. Investors can buy their shares at MTN outlets or at their local post office.
The offer is limited to black individuals and groups or black-owned businesses. Black people will be offered the shares through a special purpose vehicle (a company specifically set up to handle the transaction) called Black Investment Company.
MTN Group spokesperson Nozipho January-Bardill explains that there are no preferential conditions for potential investors; however, she notes that should the offer be oversubscribed, MTN customers who are RICA complaint will be considered first.
No preferential treatment will be given to MTN employees or directors of MTN, notes the company.
The company will use the funds raised, plus a R1.2 billion cash injection from MTN, to buy 321 million MTN ordinary shares.
Spectrum play
MTN's R8.1 billion black economic empowerment (BEE) share scheme is aimed at helping its South African operations qualify for the spectrum licence and broadband ownership requirements, note analysts.
Analysts say the deal is about ensuring MTN's South African operations meet certain requirements to obtain spectrum licences and meet the national broadband policy promoted by regulator ICASA and the Department of Communications, respectively.
“A deal of this type is long overdue,” says Denis Smit, MD of research firm BMI-TechKnowledge. “Obviously, they took into account the political realities and the 30% ownership mark came to mind.”
Although the spectrum auction has since been canned, ICASA has committed to publishing another invitation to apply before the end of the financial year. The authority has reiterated that the BEE requirement will remain.
“The deal is aimed at putting as many MTN shares into ordinary black peoples' hands as possible, so they can benefit economically from the growth of telecommunications,” concludes Vitalis Ozianyi, a senior research analyst at Frost & Sullivan.
Related story:
MTN's BEE deal to help get spectrum
Share